Independence Group to Acquire Sirius Resources

Independence Group NL (ASX:IGO) and Sirius Resources NL (ASX:SIR) announced that they’ve executed a binding scheme implementation deed under which Independence will acquire Sirius via an acquisition scheme of arrangement.

Sirius’ board has recommended that shareholders vote in favor of the transaction.

As quoted in the press release:

The transaction will create a leading diversified Australian mining company with a strong portfolio of high margin / long life mining assets, across a range of base and precious metals. The Boards of both IGO and Sirius believe that the combination of IGO’s strong cash flow and balance sheet and Sirius’ class leading Nova-Bollinger project is compelling for shareholders of both companies.

In addition, Sirius will undertake a demerger of its Polar Bear and Scandinavian exploration assets, which includes the recently discovered Baloo gold deposit, (Demerger) via a Demerger Scheme of Arrangement (Demerger Scheme), allowing Sirius shareholders to retain full exposure to the value and upside of these assets in a new listed vehicle. The vehicle will be called S2 Resources Ltd (S2) and will be led by Sirius’ founding Managing Director, Mark Bennett.

Transaction highlights are as follows:

• Transaction to be implemented via two inter-conditional Schemes of Arrangement (the Acquisition Scheme and the Demerger Scheme), and a capital reduction to effect the Demerger (Transaction).
• In exchange for their shares, Sirius shareholders will receive:
  • 0.66 IGO shares for every one (1) Sirius share held;
  • Cash consideration of 52 cents per Sirius share; and
  • Circa one (1) S2 share for every 2.5 Sirius shares held. S2 will hold the Polar Bear and Scandinavian asset portfolio currently owned by Sirius, plus approximately A$22 million cash upon listing.
• The Acquisition Scheme values the aggregate acquisition price of Sirius at A$4.38 per share or A$1.8 billion, excluding the additional value received by Sirius shareholders from their shareholding in S2. This represents a 35% premium to Sirius’ closing share price, a 46% premium to Sirius’ one-month VWAP and a 47% premium to two-month VWAP1 .
• Sirius shareholders will be entitled to receive the IGO final dividend provided the Acquisition Scheme is implemented prior to 30 September 2015.

Click here to read the full Independence Group NL (ASX:IGO) and Sirius Resources NL (ASX:SIR) press release.