Genesis and Vault to merge, create third largest ASX-listed gold miner
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The news: Gold miners Genesis Minerals and Vault Minerals have agreed to merge through a scheme of arrangement, which will see Genesis acquire all of the ordinary shares in its smaller rival Vault.
The numbers: Vault shareholders will receive 0.7629 new Genesis shares plus 47.5 cents in cash for each Vault share held. The deal implies a total consideration of $5.274 per Vault share, marking a 15.7% premium to Vault’s closing price and valuing the company at $5.6 billion.
Genesis shareholders will own 59.8% of the merged group, with Vault shareholders owning the remaining 40.2%.
The companies have outlined potential post-tax synergies of around $2 billion, including $1.5 billion over ten years due to the proximity of the miners’ operations in Western Australia.
The merged group will have a pro-forma market capitalisation of $12.6 billion, and pro-forma annual gold production of 600,000-700,000 ounces.
The context: Vault chair Russell Clark will be appointed non-executive chairman of the merged group, with Genesis’ executive chair Raleigh Finlayson set to be managing director. Genesis’ Matt Nixon and Morgan Ball will remain as CEO and CFO respectively. The board will comprise four Genesis directors and three Vault directors.
The scheme is unanimously recommended by the Vault board, and is subject to approval by Vault shareholders at a scheme meeting slated for September or October.
What they said: “This transaction represents a truly logical combination of assets to create the third largest Australian gold producer, and represents a genuine win-win for all shareholders and stakeholders, unlocking significant unique synergies through the optimisation of complementary assets,” said Finlayson.
The source: ASX
