Tahoe Resources and Lake Shore Gold Corp. to mergeStaff writer ▼ | February 9, 2016
Tahoe Resources and Lake Shore Gold Corp. entered into a definitive agreement for Tahoe will acquire all of the issued and outstanding shares of Lake Shore Gold.
Merger C$1.71 per Lake Shore Gold common share
Upon completion of the transaction, existing Tahoe and Lake Shore Gold shareholders will own approximately 74% and 26% of the pro forma company, respectively, on a fully-diluted in-the-money basis.
The exchange ratio implies a consideration of C$1.71 per Lake Shore Gold common share, based on the closing price of Tahoe common shares on the Toronto Stock Exchange (TSX) on February 5, 2016, representing a 14.8% premium to the closing price of Lake Shore Gold on February 5, 2016 and a 28.6% premium to the closing share of Lake Shore Gold on February 4, 2016.
Based on each company’s 20-day volume weighted average price on the TSX, the Exchange Ratio implies a premium of 25.7% and 30.4% to Lake Shore Gold common shares for the periods ending February 5, 2016 and February 4, 2016, respectively.
The implied equity value (assuming the conversion of in-the-money convertible debentures) is equal to C$945 million. ■