Monarch Gold agrees to friendly $200 million Yamana takeover
Monarch Gold Corp. [MQR-TSX; MRQRF-OTCQX; MR7-FSE] has entered into a definitive agreement for Yamana Gold Inc. [YRI-TSX; AUY-NYSE] to acquire the Wasamac property and Camflo property and mill through the acquisition of all of the outstanding shares of Monarch (not already owned by Yamana) for total consideration of approximately C$200 million or C$0.63 per Monarch share on a fully diluted basis, under a plan of arrangement.
Total consideration to be paid by Yamana to Monarch shareholders is approximately C$60.8 million in cash and C$91.2 million in Yamana shares. Under the plan of arrangement, Monarch will first complete a spin-out to its shareholders, through a newly-formed company (SpinCo) that will hold its other mineral properties and certain other assets and liabilities of Monarch, by issuing as consideration common shares of SpinCo having an implied value of approximately C$47.5 million.
The transaction represents a 43% premium to the closing price of Monarch shares on the Toronto Stock Exchange on October 30, 2020 and a premium of 43% to the volume weighted average price of the Monarch shares on the TSX for the 20-day period ending on October 30, 2020.
Following the completion of the transaction, Monarch Shareholders will own approximately 1.3% of Yamana and 100% of SpinCo, and Yamana will own 100% of Monarch.
The agreement has been unanimously approved by the Board of Directors of Monarch (with the exception of Yohann Bouchard who abstained) who recommends that Monarch shareholders vote in favour of the agreement. The Board of Directors of Monarch has received a fairness opinion from Stifel GMP, which state that the consideration to be received by Monarch shareholders pursuant to the agreement is fair from a financial point of view, to Monarch shareholders (other than Yamana).
The transaction will be effected by way of a court-approved plan of and subject to the approval of at least 66 2/3% of the votes cast by Monarch shareholders and optionholders, voting as a single class, at a special meeting of Monarch shareholders expected to be held near the end of December 2020.
By mid-day November 2 trading, shares of Monarch Gold gained $0.11, or 25%, to $0.55 on a volume of 11,063,700 shares traded.