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Oban Mining (TSX:OBM) has entered an agreement to acquire all issued and outstanding shares of Northern Gold Mining (TSXV:NGM) in exchange for four million shares of Oban.
Oban Mining (TSX:OBM) has entered an agreement to acquire all issued and outstanding shares of Northern Gold Mining (TSXV:NGM) in exchange for four million shares of Oban.
As quoted in the press release:
Under the terms of the Agreement, the holders of Northern Gold Shares will be entitled to receive, pro rata, an aggregate of 4,000,000 Oban Shares (subject to reduction for any Northern Gold Shares held by validly dissenting shareholders of Northern Gold, if any) in exchange for all of the issued and outstanding Northern Gold Shares. Following the completion of the Arrangement, the former shareholders of Northern Gold are expected to hold approximately 6.8% of the issued and outstanding Oban Shares in the pro forma company. The Arrangement will require the approval of at least 66⅔ percent of the votes cast by shareholders of Northern Gold at the annual and special meeting of shareholders of Northern Gold expected to take place on December 18, 2015 (the “Northern Gold Meeting”).
The Arrangement is subject to applicable shareholder, court and stock exchange approvals and the satisfaction of certain other closing conditions, including having either (i) obtained the consent of the lender to Northern Gold under the credit agreement dated October 10, 2014 (the “Northern Gold Credit Agreement”) to the Arrangement, or (ii) repaid the full amount outstanding under the Northern Gold Credit Agreement with funds loaned to Northern Gold by Oban.
The Agreement includes covenants of Northern Gold typical of transactions of this nature, including with respect to non-solicitation, a right granted to Oban to match superior proposals for Northern Gold and a provision entitling Northern Gold to a fiduciary-out. In addition, Northern Gold has agreed to pay a termination fee to Oban upon the occurrence of certain events.
The board of directors of Northern Gold has unanimously approved the Arrangement and will recommend that shareholders of Northern Gold vote in favour of the Arrangement. A management information circular is expected to be mailed to shareholders of Northern Gold in connection with the Northern Gold Meeting to be held to, among other things, consider the Arrangement and in accordance with applicable securities laws. Northern Gold expects to mail the management information circular in late November 2015.