SLR -11.46%: the gold miner’s board has today agreed to a merger with Red 5 (RED) in a deal to create a ~450koz/year mid-tier Aussie gold producer. Strangely, the Silver Lake board has agreed to a deal at a deep discount to Friday’s close price, at 3.434 RED shares for each SLR, equating to ~$1.13/sh or a ~10% discount. Silver Lake already owns 11.9% of RED shares but would end up with 48.3% of the new group. While the deal makes sense from the perspective of synergies and the balance sheet, it seems a poor outcome for Silver Lake shareholders in the short term.
MM remains long and bullish SLR over the medium term
Add To Hit List
