On the 17th August, Ausgold (AUC AU) entered into a Scheme with OceanaGold (OGC CN). OceanaGold offered 0.03365 new shares per Ausgold share. A capped cash option (A$1.36/share) is afforded.
Post merger, Ausgold shareholders would hold ~7.9% (if 100% scrip consideration). A key shareholder and directors (collectively holding 9.1%) are supportive.
The Scheme Booklet is now out, with a 27th November Scheme Meeting, and expected implementation on the 11th December. The IE (Lonergan Edwards) concluded “fair and reasonable“. Clean deal.
The Trade:
Another straightforward gold merger.
Current scrip terms are within the IE fair valuation range.
Implied terms have dipped ~6% since the Offer was announced.
Trading tight at a gross/annualised spread of 0.9%/6.6%.
IF you can take down borrow cheaply in OceanaGold , do so, if not already, you could short OceanaGold late in the day, and buy Ausgold early in the day.
FIRB approval is still outstanding. Should not be an issue.