Stillwater Mining Co. said Dec. 9 that it signed an agreement with Sibanye Gold Ltd., under which a U.S. Sibanye unit will acquire Stillwater's entire share capital for US$18.00 in cash per share, putting the deal value at US$2.2 billion.
The consideration represents a 61% premium to Stillwater's volume-weighted average share price over the 52 weeks prior to the announcement and a 25% premium to its volume-weighted share price over the last 30 trading days.
Stillwater's board has unanimously approved the transaction after a review of strategic opportunities.
The closing of the transaction remains subject to conditions, including the approval of the majority of the companies' shareholders. Sibanye's two largest shareholders, with a combined 29% interest in the company, have pledged support for acquisition.
Sibanye has secured a US$2.7 billion bridge financing from Citi and HSBC, which will be used to fund the acquisition and repay debts owed by Stillwater.
Should the agreement be terminated in circumstances including if Stillwater's board changes its recommendation, Stillwater will be required to pay a break-up fee of US$16.5 million and reimburse Sibanye for up to US$10 million.
On the other hand, Sibanye will be required to pay a US$33 million break-up fee should the merger deal be terminated due to reasons including failure to secure the approval of Sibanye's shareholders.
The parties expect the transaction to close in the second quarter of 2017.