The Northern Star Resources Ltd (ASX: NST) share price and the Saracen Mineral Holdings Limited (ASX: SAR) share price will be on watch on Thursday after the release of an update on their merger plans this afternoon.
What did they announce?
This afternoon the two gold miners jointly announced that all Northern Star financier consents and material Saracen facilities and relevant agreements consents required under their merger implementation deed have been obtained and are now satisfied.
This brings the completion of the mega merger a step closer, though it is far from being complete.
The scheme of arrangement, which will see Northern Star acquire 100% of Saracen, remains subject to a number of other remaining conditions. These include approval being obtained from Saracen shareholders and court approval.
Saracen is intending to circulate a scheme booklet to shareholders next month. This booklet contains information about the scheme, the independent expert’s report, and the basis for its board’s unanimous recommendation.
If all goes to plan and Saracen shareholders vote to approve the merger, the scheme is expected to be implemented in February 2021.
The scheme continues to be unanimously endorsed and supported by the Northern Star board, subject to no superior proposal for Northern Star emerging.
Why are the two gold miners merging?
When the merger was announced back in October, Northern Star’s Executive Chair, Bill Beament, stated his belief that the merger will create a lot of value for both sets of shareholders.
He explained: “Northern Star has only ever pursued growth when it will create value for shareholders, and this merger-of-equals will create an abundance of value for both Northern Star and Saracen shareholders.”
“This is significant value-creating M&A. Our position as joint venture partners at KCGM, the close proximity of the majority of the combined company’s assets and a host of other synergies makes this a unique opportunity exclusive to Saracen and Northern Star shareholders,” he concluded.
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