St Barbara Limited (“St Barbara”) (ASX: SBM) notes the announcement by Silver Lake Resources Limited (“Silver Lake”)
(ASX:SLR) on the evening of 19 May 2023 setting out the terms of a revised non-binding, indicative and conditional proposal
(“Revised Non-binding, Indicative and Conditional Proposal”) for St Barbara’s Leonora assets.
The Revised, Non-binding, Indicative and Conditional Proposal from Silver Lake comprises:
• Cash consideration of $370 million (previously $326 million); and
• Scrip consideration, comprising 327.1 million new Silver Lake shares (unchanged from Silver Lake’s previous proposal).
The net after-tax value of the Revised Non-binding, Indicative and Conditional Proposal, after allowing for the $5.4 million break
fee contemplated in the fully documented and binding transaction agreement between Genesis Minerals Limited (“Genesis”)
(ASX:GMD) and St Barbara (“Transaction Agreement”), is estimated to be $650 million1
, which is:
• Approximately 10% above the net after-tax value of the consideration payable2 under the transaction contemplated in the
Transaction Agreement (“Binding Genesis Transaction”); and
• Approximately 5% above the net after-tax value of the consideration payable3 under the Binding Genesis Transaction
before the uncertainty created by the media release of the Silver Lake approach (“Silver Lake Media Release”) on 4
No improvement in the conditionality has been proposed by Silver Lake in its Revised Non-binding, Indicative and Conditional
St Barbara Board determines not to engage with Silver Lake
St Barbara notes that while the Revised Non-binding, Indicative and Conditional Proposal contemplates additional cash which
would support the liquidity of St Barbara going forward, the proposal remains non-binding and unacceptably conditional and
contrasts to the fully documented, fully financed and shareholder-supported Binding Genesis Transaction.
This conditionality will remain even in the event that Silver Lake ultimately provides a binding proposal, as it will still be subject to
Silver Lake shareholder approval. Critically, the Revised Non-binding, Indicative and Conditional Proposal requires St Barbara to
terminate the Binding Genesis Transaction (and lose the associated $400 million Genesis capital raising) at a time when Silver
Lake’s proposal is conditional on, at a minimum, a Silver Lake shareholder vote. In this situation, the Silver Lake transaction would
become an “option” for Silver Lake, with St Barbara shareholders entirely exposed to the outcome of the Silver Lake shareholder
vote and the potential failure to satisfy any other remaining conditions precedent. No indication of Silver Lake shareholder support
has been provided by Silver Lake (notwithstanding St Barbara’s written request), and St Barbara has no basis for expecting that
Silver Lake can deliver a satisfactory level of certain shareholder support in the time available.
St Barbara’s concern over the level of Silver Lake’s own shareholder support is, in St Barbara’s view, evidenced by the consistent
pattern of trading in Silver Lake shares on ASX since Silver Lake announced its first proposal for the Leonora assets. For example,
the Silver Lake share price has fallen by an average of 5% on the trading day after each announcement of a Silver Lake proposal4
and decreased by a total of 19% since Silver Lake announced its first proposal for the Leonora assets on 4 May 20235
This is to be contrasted with the Binding Genesis Transaction which has received indications of support from 49% of Genesis’
shares on issue6
1 On the basis of 327.1 million Silver Lake shares valued at the 22 May 2023 closing price of $1.035 and cash of $370 million.
2 On the basis of 205 million Genesis shares valued at the 22 May 2023 closing price of $1.180 and cash of $370 million. Assumes that St Barbara shareholders
approve the Binding Genesis Transaction and associated resolutions on or before 30 June 2023.
3 On the basis of 205 million Genesis shares valued at the 4 May 2023 2:10pm (estimated time at which the Silver Lake Media Release was broadly available to the
market) intraday price of $1.385 and cash of $370 million.
4 Average of the 4.34% intra-day (post-2:10pm) fall in share price on 4 May 2023, 5.35% fall in share price on 11 May 2023, and the 4.45% fall in share price on 22 May
5 Total fall in share price since the 4 May 2023 2:10:00 PM (estimated time at which the Silver Lake Media Release was broadly available to the market) intraday price of
$1.270 per share with respect to the 22 May 2023 closing price of $1.035.
6 Genesis ASX announcement of 19 May 2023 titled “Strong shareholder support for Genesis’ acquisition of St Barbara’s Leonora assets and growth strategy”
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