(Alliance News) - Altus Strategies PLC said Tuesday it has come to an agreement with Elemental Royalties Corp over an all-share merger.
Vancouver, Canada-headquartered Elemental Royalties will issue Altus shareholders 0.5940 new shares in the enlarged group. As a result, Elemental shareholders will own about 52.9% of the new firm, with Altus shareholders holding 47.1%.
Shares in Altus were down 5.7% in London just after midday at 43.85 pence each, giving it a market cap of about GBP51.4 million.
"The boards of Elemental and Altus believe that the merger has compelling strategic logic and represents an attractive opportunity for both companies to create a global gold royalty company," the pair said in a statement on Tuesday.
Altus noted the exchange ratio offer "fair value" for both sets of shareholders.
Steven Poulton, current chief executive of Altus, will be appointed as executive chair of the new group, while Frederick Bell, current CEO of Elemental, will be appointed as CEO.
The new firm will be called Elemental Altus Royalties Corp.
Elemental noted it has received irrevocable undertakings from 57.9% of Altus shares, while 50.7% of Elemental shareholders have already backed the deal.
Poulton said: "Combining Altus and Elemental will create a new, strong and dynamic income-generating champion in the mining royalty sector. The transaction will bring significant benefits to all current shareholders and establish a compelling investment proposition to potential new institutional and other investors.
"Our enlarged scale and combined revenues will not only enhance our access to further high-quality royalties, but will also potentially reduce our cost of capital going forward. Shareholders of the enlarged group will also benefit from its differentiated strategy of low-cost and potential high-return royalty generation. As we succeed, we look forward to targeting medium-term capital distributions, as well as participating in further accretive consolidation opportunities in the royalty sector."
By Paul McGowan; paulmcgowan@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
