Mr. Jacques Perron of Pretium Resources reports
NEWCREST TO ACQUIRE PRETIVM FOR C$18.50 IN CASH AND SHARES
Pretium Resources Inc. has entered into a binding agreement with Newcrest Mining Ltd. under which Newcrest has agreed to acquire all of the outstanding shares of Pretium that it does not already own. Pursuant to the transaction, Pretium shareholders will have the option to elect to receive $18.50 per Pretium share in cash or 0.8084 Newcrest share per Pretium share, representing share consideration of $18.50 based on the Canadian-dollar equivalent of the five-day volume-weighted average price (VWAP) of Newcrest shares on the Australian Securities Exchange ending on Nov. 8, 2021, subject to proration to ensure aggregate cash and Newcrest share consideration each represent 50 per cent of total transaction consideration. Pretium shareholders who do not elect cash or Newcrest shares (subject to proration) will receive default consideration of $9.25 per Pretium share in cash and 0.4042 Newcrest share per Pretium share.
The transaction price represents a premium of 23 per cent and 29 per cent to the closing price and the 20-day VWAP, respectively, of Pretium's shares on the Toronto Stock Exchange as at Nov. 8, 2021. The total equity value pursuant to the transaction is approximately $3.5-billion on a fully diluted basis. Newcrest currently owns approximately 4.8 per cent of Pretium's shares. If consummated, the transaction would result in Pretium shareholders owning approximately 8 per cent of Newcrest, on a fully diluted basis.
"The acquisition of Pretium by Newcrest is an outstanding opportunity for the company and its shareholders, employees, first nations partners and the local communities in northwest British Columbia," said Jacques Perron, president and chief executive officer of Pretium. "The transaction delivers an immediate and compelling premium for Pretium shareholders that reflects the excellent work of our employees and contractors in developing and operating the Brucejack gold mine, while also offering an opportunity to benefit from potential upside as Newcrest shareholders."
"With this acquisition, Brucejack will join Newcrest's portfolio of Tier 1 assets, mitigating the inherent risks associated with ownership of a single-asset mining company. Moreover, Newcrest has the financial means and the intention of maximizing the long-term potential of the Brucejack mine and the district-scale opportunities in the surrounding Brucejack property. Newcrest and Pretium have complementary corporate cultures and values, with a focus on safety, employee development and ESG. We believe our employees, first nations partners and community partners will be very well positioned to succeed and develop under Newcrest's world-class stewardship."
Details of the transaction
The transaction, which is not subject to a financing condition, will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) and will require the approval of 66-2/3rds pe cent of the votes cast by (i) the holders of Pretium's common shares and (ii) holders of options to acquire shares of Pretium, voting together as a single class, at a special meeting of Pretium securityholders to be held to consider the transaction. In addition to approval by Pretium shareholders and optionholders, the transaction is also subject to the receipt of court approval, regulatory approvals, including approval under the Investment Canada Act and competition clearances in Canada, and other customary closing conditions for transactions of this nature. The transaction is expected to be completed in the first quarter of 2022.
The arrangement agreement provides for customary deal protection provisions, including a non-solicitation covenant on the part of Pretium and a right for Newcrest to match any superior proposal (as defined in the arrangement agreement). The arrangement agreement includes a termination fee of $125-million, payable by Pretium, under certain circumstances (including if the arrangement agreement is terminated in connection with Pretium pursuing a superior proposal). The directors and senior officers of Pretium, owning in aggregate approximately 0.2 per cent of Pretium's voting securities, have agreed to vote all the shares and options they own or control in favour of the transaction.
Pretium board of directors and special committee recommendations
A special committee consisted entirely of independent directors of Pretium unanimously recommended the transaction to the board of directors of Pretium. The Pretium board has evaluated the arrangement agreement with the company's management and legal and financial advisers, and, following the receipt and review of a unanimous recommendation from the special committee, the Pretium board has unanimously determined that the arrangement agreement is in the best interest of the company, and the Pretium board has resolved to recommend that the company shareholders vote in favour of the transaction, all subject to the terms and conditions contained in the arrangement agreement.
BMO Capital Markets has provided an opinion to the Pretium board, and Citi has provided an opinion to the Pretium special committee and board, based upon and subject to various assumptions, limitations and qualifications, as to the fairness, from a financial point of view, and as of the dates of such opinions, to holders of Pretium common shares (other than Newcrest and its affiliates) of the consideration to be received by such holders in the transaction.
Further details regarding the terms of the transaction are set out in the arrangement agreement, which will be publicly filed by Pretium under its profile on SEDAR. Additional information regarding the terms of the arrangement agreement, the background to the transaction, the rationale for the recommendations made by the special committee and the Pretium board, and how Pretium shareholders can participate in and vote at the special meeting to be held to consider the transaction will be provided in the management information circular for the special meeting, which will also be filed on SEDAR. Shareholders are urged to read these and other relevant materials when they become available.
Advisors and counsel
BMO Capital Markets is acting as financial adviser to Pretium, Blakes, Cassels & Graydon LLP is acting as Pretium's Canadian legal counsel, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as Pretium's U.S. legal counsel. Citi is acting as financial adviser to the special committee and Stikeman Elliott LLP is acting as the special committee's legal counsel. Longview Communications and Public Affairs is acting as communications adviser to Pretium.
RBC Capital Markets and Lazard Australia are acting as financial advisers to Newcrest, and McCarthy Tetrault LLP is acting as Newcrest's legal counsel.
Webcast and conference call
Pretium and Newcrest will host an investor conference call and webcast to discuss the transaction at 3:30 p.m. Pacific Time (6:30 p.m. Eastern Time) today, Nov. 8, 2021. See the Newcrest website.
In light of the transaction, Pretium has cancelled its previously scheduled third quarter investor conference call on Nov. 12, 2021. The third quarter disclosure will proceed as scheduled on Nov. 11, 2021.
About Pretium Resources Inc
Pretium is an intermediate gold producer with the 100-per-cent-owned, high-grade gold underground Brucejack mine, located in northwestern B.C. The company strives for operating excellence, and its first priority is the health and safety of its employees, contractors and neighbouring communities. Pretium is committed to the principles of sustainable development and conducting its activities in an environmentally and socially responsible manner.
We seek Safe Harbor.
© 2022 Canjex Publishing Ltd. All rights reserved.