The Big River Gold Ltd (ASX: BRV) share price is skyrocketing today after the company announced an all-cash takeover offer from multinational mining company Aura Minerals Inc (TSE: ORA).
Big River Gold is a minerals explorer whose main focus is its 100%-owned Borborema Gold Project in Brazil. The mine has a resource of 2.43Moz of gold.
Aura is offering to buy Big River Gold for 36 cents per share. That's a 33% premium on yesterday's closing price of 27 cents. ASX gold investors have wasted no time bidding up the company's shares this morning to cash in on the arrangement. While it's not a done deal yet, all Big River Gold directors and two major shareholders representing almost 40% of the vote have declared they'll be voting yes to the buyout.
At the time of writing, the ASX gold share is trading at 34.5 cents, up 27.78%.
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'Vote yes', says Big River Gold management
So first, here's the nitty-gritty. Big River Gold has executed a binding scheme implementation deed with Aura proposing that Aura subsidiary Aura BidCo will acquire 100% of Big River Gold by way of a scheme of arrangement between the ASX gold share and its shareholders.
Big River Gold's independent board committee is recommending shareholders vote in favour of the deal unless a superior offer is made, subject to an independent expert confirming it's in the best interests of investors.
The key highlights are as follows:
- The offer of 36 cents per share represents a premium of 30% to the 30 trading day VWAP [volume weighted average price] of 27.7 cents per share; 42.3% to the 60 trading day VWAP of 25.3 cents per share; and 44% to the 90 trading day VWAP of 25 cents per share
- The scheme consideration values Big River's diluted equity at approximately $91.7 million
- Each Big River Gold director intends to vote in favour of the deal
- The deal is subject to various conditions, including approval from ASIC and shareholders
Major shareholders give the thumbs up
Two major investors in the ASX gold share have indicated their intention to vote in favour of the buyout.
Canadian investment company Dundee Resources Limited (voting power 19.3%) plans to vote yes and will likely receive unlisted shares in Aura BidCo in lieu of the cash consideration.
Australian private investment company Copulos Group (voting power 18.8%) has signed a voting intention statement saying it will vote in favour of the takeover, subject to certain conditions.
The scheme meetings are expected to be held in early to mid-July, with implementation to follow in July or August.
If the scheme proceeds, Big River Gold will become a subsidiary of Aura. It will be delisted from the ASX and held under a joint venture between Aura and Dundee.
Big River Gold has appointed NextLevelCorporate as its financial advisor and MinterEllison as its legal advisor. Shareholders will receive a scheme booklet in June and will likely vote on the takeover in July.
Big River Gold share price recap
The ASX gold share has a 52-week high price of 42 cents per share. It was swapping hands at that level back in May last year. The share price has drifted down over the past 12 months by almost 18%.
