Silvercorp Adjusts Takeover Bid for OreCorp in Response to Outside Interference

Vancouver-based mining company Silvercorp Metals Inc. (TSX: SVM) has unveiled a revised takeover bid for Australian gold developer OreCorp Limited, citing concerns over the completion of the initially proposed scheme due to external factors. The amended offer, structured under a new Bid Implementation Deed (BID), maintains the same per-share cash and stock consideration but introduces a modified approach to ensure a successful acquisition.

Under the terms of the BID, Silvercorp aims to acquire all the shares it does not currently own in OreCorp, where it already holds a nearly 16% stake. The newly adjusted deal is conditional on Silvercorp securing a simple majority of OreCorp shares, signaling the company’s commitment to a streamlined and efficient acquisition process.

Silvercorp CEO Rui Feng highlighted the necessity of the revised offer, stating, “Our offer is subject to a very limited number of conditions.” The adjustment comes in response to potential risks associated with the earlier proposed scheme, attributed to external interference. In late November, Silvercorp faced challenges following an increase in Perseus Mining’s stake in OreCorp, prompting a reassessment of the takeover strategy.

OreCorp’s Board, responding to the revised bid, has unanimously recommended that shareholders accept the offer, emphasizing the enhanced certainty and timely completion offered by Silvercorp’s adjusted proposal. The BID Deed includes market-standard deal protection measures, such as “no talk” and “no due diligence” provisions, along with notification and matching rights for Silvercorp in the event of a competing proposal.

Shares of OreCorp responded positively to the news, surging as much as 11.8% to A$0.57, marking their highest level since December 5, 2022. The stock is set for its best day since August 7, with the current gains reflecting investor confidence in the revised acquisition terms. The deal is structured to provide OreCorp shareholders with 0.0967 common shares of Silvercorp and A$0.19 cash per OreCorp share, equivalent to A$0.589 per share and representing a premium of 15.5% to the last close.

Feng encouraged OreCorp shareholders to consider the forthcoming Bidder’s Statement for detailed information on the offer and to accept the proposal promptly. The BID is not subject to Silvercorp shareholder approval, financing, or due diligence conditions, providing a level of certainty in the acquisition process.

The termination of the previously agreed Scheme Implementation Deed (SID) and the OreCorp Board seeking court orders to cancel the proposed Scheme meeting further underscore the commitment of both companies to swiftly move forward with the revised takeover bid.

Canaccord Genuity Corp. serves as Silvercorp’s financial advisor, while King & Wood Mallesons in Australia is fulfilling the role of Silvercorp’s legal advisor in the country.

Silvercorp Metals Inc. last traded at $2.77 on the NYSE American.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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