Thursday, April 5, 2018

Proposed Merger of Equals between Alliance Mineral and Tawana Resources

Announcements can be found here.

Key takeaway:
  • Under the proposed merger of equals between Alliance Minerals (SGX: 40F) and Tawana Resources (ASX: TAW), Tawana will become a subsidary of Alliance Minerals, with proforma ownership split 51/49 between Alliance/Tawana shareholders.
  •  The proforma Market Cap post-merger is expected to be ~A$446m and this will place the merged entity in the position of a Mid-Cap producer.
  • Capital raising to take place.
  • In an earlier news, 85% of non-Bald Hill assets such as Cowan will be spun off in a Spinco (no actual name yet), with ownership by existing Tawana shareholders. There will still be a 15% stake by Tawana thereafter prior to the merger. This also translates to the merged entity having ~7.5% stake in these assets.
  • Mark Calderwood (Managing Director of Tawana) will be the Managing Director of the merged entity.
  • Existing Tawana shareholders will receive 1.1 Alliance Mineral shares for every 1 Tawana share exchanged post-merger. Thereafter Tawana will delist.
  • Alliance Mineral to look to listing on ASX as well.
  • The merger is subject to an independent expert concluding the merger is in the best interest of Tawana shareholders.
  • The merger, if successful, is scheduled to complete on October 2018.

My reaction:


The current reaction over at HotCopper forums seems mixed. Let's see what happens over there after a few days. If Tawana shares really plunges on resumption of trading, it could be a good opportunity to accumulate.

As an Alliance Mineral shareholder, this is a pleasant surprise, especially given that we will earn in ownership to the spun-off properties. I guess in a sense, this also answers my previous question about the business directions of Alliance Mineral going forward. Staying vested.

Previously I have talked specifically about Alliance Minerals here:

Disclaimer: The above should not be used as a decision to solicit buy/sell activity. Use all information at your own discretion and DYODD

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