Regis Resources (RRL AU) & Vault Minerals (VAU AU) Claim Each Other

• Gold fever continues down under as Regis Resources (RRL AU) and Vault Minerals Ltd (VAU AU) announce a A$11bn merger, creating the ASX’s third largest gold miner.

• By way of a Scheme, Regis is offering 0.6947 new shares for each Vault share. Post merger, Regis and Vault shareholders will hold 51% and 49% in the combined entity.

• Both boards unanimously back the transaction, which is projected to complete late August, early September. Clean deal.

The Trade:

• Another straightforward, albeit, large gold merger.

• Trading at a gross/annualised spread of 5.4%/18% assuming late August completion.

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

• Index related, the Quiddity Index team reckons 4.2 days of buying for Vault (to replace Qube Holdings (QUB AU) end of June, early July; and 6.4 days for Regis - this was prior to this deal being announced.

  • In addition, Regis and Vault are somewhat high in the ranking to be added to the market vector gold miners index late June - with a decision around the 10th June.