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Duluth Metals (TSX:DM) announced it has entered into a binding agreement with Antofagasta PLC with Antofagatsa acquiring all of the outstanding common shares of Duluth for $0.45 per share. As part of the agreement Antofagasta has agreed to provide Duluth with a private placement of $2.3 million as well as extending the outstanding bridge loan from Antofagasta to Duluth for 12 months.
According to the press release:
The Acquisition Agreement contains customary deal support provisions, including non-solicitation, superior proposal and right-to-match provisions in favour of Antofagasta and the payment to Antofagasta of a termination fee of CDN$3.5 million if the acquisition is not completed in certain specified circumstances. Antofagasta has also agreed to provide Duluth with a private placement of CDN$2.3 million at CDN$0.45 per share. In addition, Antofagasta has agreed to extend the term of the currently outstanding bridge loan from Antofagasta to Duluth by 12 months, with the repayment date subject to acceleration in certain circumstances. Duluth’s Board of Directors has agreed that its directors’ circular (if required) recommending the Offer will be mailed to shareholders at the same time as the mailing of the Antofagasta take-over bid circular. The Acquisition Agreement contemplates definitive agreements being entered into by November 21, 2014 and provides Antofagasta with a due diligence condition which must be satisfied or waived on or before the entering into of the definitive agreements. The Offer is subject to a 66-2/3% tender or approval condition.
Kelly Osborne, President and CEO, said:
We are pleased to reach an agreement with our partner Antofagasta and enter into this acquisition transaction. During a difficult period for the mining industry, Duluth has been able to negotiate a significant premium to the current market share price.
Click here to read the Duluth Metals Limited (TSX:DM) press release
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