Independence Day for Sirius
Independence Group managing director Peter Bradford has waved away suggestions the company's $1.8 billion bid for Sirius Resources is the first step in a bigger acquisition spree, saying the company has "some digestion to do" before looking for further growth.
The friendly tie-up will create a $2.7 billion mid-tier miner, with Sirius shareholders emerging with about 54 per cent of the combined group.
Under the terms of the deal, Independence Group will issue 0.66 of its own shares for each Sirius share on issue. It will also pay 52¢ a share cash to sweeten the offer.
Goldfields prospecting legend Mark Creasy, who controls 34.6 per cent of Sirius shares, will own 18.6 per cent of the combined group.
He will also be paid $74.4 million of the $214 million cash component of the offer.
In addition, Sirius shareholders will retain an interest in the company's emerging gold assets near Kalgoorlie, with Sirius managing director Mark Bennet to helm a separate spin-out company controlling the Polar Bear and Balloo gold projects.
The new company, to be named S2 Resources, will also contain Sirius' Finnish base metals projects.
It will exit the combined group with about $20 million to develop its exploration projects.
The acquisition of Sirius' Nova-Bollinger nickel and copper project as a cornerstone asset will cement Independence Group's place as Australia's leading diversified mining group, according to Mr Bradford.
The Independence boss said yesterday he was comfortable with the $1.8 billion price-tag agreed for Sirius.
"I always say the best negotiations are when both sides walk away feeling like they haven't got exactly what they want," he said.
"In this particular case that's the situation.
"We would have liked to get it a little bit cheaper and Mark (Bennet) from the Sirus side would have liked to get a slightly better premium. So I think we've got the line in the sand in the right place."
Mr Bennett, who will join the combined board as a non-executive director, said he would be sad to walk away from an executive role overseeing the development of the Nova mine, but believed the merger was in the company's interest.
"I'm not worried about running it, and I'm very pleased I'll be there to see it," he said.
"But it's not about me, it's about the shareholders at the end of the day, and I think it's a good deal for them."
Mr Bradford said the company would need to take some time to digest Sirius.
Sirius shares gained 66, or 20.3 per cent to close of $3.90 yesterday.
Independence Group closed down 70¢, or 12 per cent, to $5.15.
