The St Barbara Ltd (ASX: SBM) share price is glittering on Thursday.
The gold miner's shares were up 10% to 70.25 cents before being paused from trade.
They have since come back and ended the day 7% higher at 68.5 cents.
Why is the St Barbara share price surging?
Investors were bidding the St Barbara share price higher amid speculation that the company's Leonara assets were in the crosshairs of another gold miner.
As a reminder, the company recently agreed a $641 million deal with Genesis Minerals Ltd (ASX: GMD) for the assets. This comprised upfront cash of $370 million, 147.8 million shares in Genesis, and an additional 52.2 million shares contingent upon the Tower Hill Project achieving first production.
Well, investors that snapped up shares will be pleased to learn that the speculation was accurate.
According to an announcement this afternoon, fellow gold miner Silver Lake Resources Ltd (ASX: SLR) has tabled a competing offer to acquire St Barbara's Leonara operations.
Silver Lake makes its play
The release reveals that last week Silver Lake made an unsolicited, non-binding, indicative and conditional proposal worth $732 million. This comprises cash consideration of $326 million and 327.1 million new Silver Lake shares with an implied value of $406 million.
This is approximately 9% above the net after-tax value of the Genesis consideration.
However, despite this premium, management has decided that the offer is not actually superior to the Genesis agreement and has rejected the proposal. It said:
Based on the information contained in the Non-binding, Indicative and Conditional Proposal, and the responses received in response to the St Barbara Information Request, the St Barbara Board has concluded that the terms offered by Silver Lake do not constitute a superior proposal to the Genesis transaction and do not satisfy the "fiduciary out" exceptions to the "no talk" and "no due diligence" obligations under the Transaction Agreement.
Among the reasons for the rejection are its limited premium, the lack of synergies between their assets, the lower cash offer, and risks around timing and the independent expert's report.
Time will tell if Silver Lake returns, but for now, St Barbara advised that it will "not be further engaging" with the gold miner.
The St Barbara share price is down almost 50% over the last 12 months.
