Genesis Crashes Regis & Vault's Party With Superior Terms

• Back on the 5th May, West Aussie gold miners Regis Resources (RRL AU) and Vault Minerals Ltd (VAU AU) announced a A$11bn scrip merger, by way of a Scheme.

• What appeared to be another straightforward, albeit, large gold merger, has unravelled after Genesis Minerals (GMD AU) pitched a “superior” cash/scrip Offer yesterday morning.

• Post merger, Genesis shareholders would own ~59.8% of the combined company, and Vault ~40.2%; versus 51%/49% under Regis’ terms. Regis has until the 13th July to match Genesis’ terms.

The Trade:

• Perhaps Regis matches. But ultimately I see Regis taking the A$50mn break fee and walking.

• Regis shares were down ~7.5% ahead of Genesis’ Offer, reflecting market concerns they were overpaying. Genesis/Vault synergies are more apparent.

• Vault is trading almost right at terms to Genesis’ Offer.

• If you can take down borrow cheaply in Genesis, do so, if not already.