Gold miners Bendigo, BCD to merge
Australian gold producers Bendigo Mining (ASX:BDG) and BCD Resources (ASX:BCD) have entered into a scheme implementation arrangement to merge the companies into a larger mining business.
Based on the last closing price of both companies, the deal would create an entity with a combined market capitalisation of $162 million.
Under the proposed agreement, Bendigo Mining will obtain all shares in BCD. BCD stockholders will receive 0.72 Bendigo shares for each BCD share held. This implies an offer of 14.4 cents per BCD share, a premium of 44 per per cent to its last closing price.
"The merger is unanimously recommended by the BCD directors and each of the directors of BCD (and each relevant entity controlled by a BCD director) intends to vote in favour of the scheme in the absence of a superior proposal and subject to the independent expert concluding that the scheme is in the best interests of BCD shareholders," the companies said in a joint statement.
The healthier financial position of the entity formed by the merger will expedite the development of BCD's high-grade Tasmania mine.
"Bendigo has agreed to provide to BCD a pre-completion loan of up to $8 million to accelerate the development of BCD's Tasmania Mine and for working capital purposes," the companies said.
The merger is still subject to the approval of BCD shareholders, at a meeting scheduled in November.