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4/26/17

Sandstorm buys Mariana (UPDATED)

Woah! Here's the chewy bit:


Under the terms of the Combination, Mariana shareholders will receive 28.75 pence in cash and 0.2573 of a Sandstorm share for each one Mariana share held. The Combination values Mariana at approximately 110 pence per Mariana share based on the closing price of US$4.04 per Sandstorm Share on the NYSE MKT and a currency exchange rate of £0.7788 per USD, on April 25, 2017.
The terms of the Combination represent a premium of approximately 84% to the closing price of 59.50 pence per Mariana share on April 25, 2017 and a premium of approximately 88% to the 20-day VWAP per Mariana share.
If successful, the Combination will result in Mariana shareholders, together, owning approximately 19.0% of the ordinary share capital of the Combined Group.
Sandstorm holds 8,980,243 Mariana shares, representing approximately 7.0% of the issued ordinary share capital of Mariana, and Mariana warrants over a further 4,490,122 Mariana shares.

UPDATE: MARL has opened at 87p in London on 3m shares traded. That's only just above its recent January highs and plenty below the nominal 110p offer price, probably due to UK capital gains tax laws. The lack of percentage lock-up is the main barrier to deal success here, so SAND may look like it's pitching high, what it's really doing is telling UK instos that this is a tax-efficient way of buying their shares. You can think what you like about the Hot Maden asset (for what it's worth, I like it and like it even more after the Yes vote in the recent referendum), but it's clear that Nolan has done his homework on the deal structure and thought it through well. After all, they'll still be 81% of the newco...that doesn't leave room for a massive price dumpage for SAND today.