Stellar Diamonds announced negotiations regarding a possible share offer for the entire issued and to be issued share capital of the company by Newfield Resources.The board of Stellar Diamonds announced that it is in advanced negotiations regarding a possible share offer for the entire issued and to be issued share capital of the Stellar Diamonds by Newfield Resources (NWF) to be implemented by means of a Court-sanctioned scheme of arrangement of Stellar under Part 26 of the companies Act 2006.
Under the Possible Offer, Stellar Diamonds shareholders and the holders of rights over Stellar Diamonds ordinary shares would receive in aggregate 95.5 million shares in NWF, expected to equate to approximately 16.4% of the enlarged share capital of NWF assuming completion of the NWF Financing and the possible offer.
Stellar shareholders would receive approximately 0.76 of a NWF share for each Stellar Diamonds share held.
Based on the closing share price of A$29 cents per NWF share on 31 January 2018 the terms of the possible offer imply an offer value of 12.7 pence per Stellar share, representing a premium of:
- 452% to the closing price of Stellar shares of 2.3 pence on 31 January 2018;
- 412% to the volume weighted average closing price of Stellar shares in the 3 months prior to and including 31 January 2018.
Based on the theoretical ex-rights price of NWF shares of A$22.3 cents per share in connection with completion of the NWF Financings, the terms of the Possible Offer imply an offer value of 9.77 pence per Stellar share, representing a premium of:
- 325% to the closing price of Stellar shares on 31 January 2018
- 294% to the volume weighted average closing price of Stellar shares in the 3 months prior to and including 31 January 2018
Parties with rights over ordinary shares will be made an appropriate share offer based on the value of such warrants or options taking into account the relevant exercise price of each option or warrant and the Theoretical Ex-rights Price Offer Value per Stellar ordinary share and the Possible Offer Ratio stated above.
For illustrative purposes, out of the 95.5 million NWF offer shares proposed to be issued pursuant to the Possible Offer, approximately 47.3 million NWF offer shares would be issued in respect of the Stellar Diamonds shares currently in issue.
It is also the intention of NWF to repay (in cash) the company’s convertible loan notes and associated accrued interest within 30 days of completion of the Possible Offer.
Whilst the negotiations with NWF are very advanced at this stage and this announcement has been made with the approval of NWF, there can be no certainty that any offer will be made for the Stellar Diamonds nor as to the final terms of any offer.
Feature image credit: Wikimedia