Stillwater Mining Company being bought for $2.2 billion
The Stillwater Mining Company (SMC) is being bought for $2.2 billion by a South African company.
SMC's board of directors unanimously approved the all-cash transaction, which was announced in a press release issued early Friday morning, Dec. 9.
SMC CEO Mick McMullen told the News Friday the merger will result in very little, if any, changes.
"It's business as usual," said McMullen, adding that SMC will no longer be listed on the U.S. Stock Exchange.
SMC's name will remain the same until the merger is complete and at this point, McMullen said there is no indication that it will be changed.
The closing of the merger agreement is subject to the approval by the holders of a majority of SMC's outstanding shares as well as the holders of a majority of Sibanye's shares, present and voting.
SMC shareholders consists of approximately 40 percent non-U.S. and Sibanye's shareholders consists of approximately 40 percent U.S. shareholders, said McMullen.
As far being an attractive merger through the eyes of shareholders, McMullen cited the $18 per share purchase price, as well as it bringing more diversity to both companies. He also spoke the U.S. economy being a risk that could not be mitigated and that at the moment, the U.S. dollar is the strongest currency in the world.
"They want to learn from us," McMullen told the News, emphasizing that safety is of tantamount interest.
McMullen had a conference call with employees early Friday morning. The sale is expected to be completed sometime in 2017.
Sibanye Gold Limited of South Africa will acquire SCM at $18 a share, totaling $2.2 billion. That share price is a 61 percent premium to SMC's volume-weighted average share price over the past 52 weeks and a 25 percent premium to its volume-weighted share price over the past 30 days, according to the press release.
Under the terms of the merger agreement, a U.S. subsidiary of Sibanye has agreed to acquire all of the outstanding shares of Stillwater for $18.00 per share in cash.
The closing of the merger agreement is subject to the following:
•The approval by the holders of a majority of SMC's outstanding shares.
•The approval of the transaction by the holders of a majority of Sibanye's shares present and voting.
•The approval of the related issuance of shares by Sibanye in a rights offering by the holders of at least 75 percent of the shares present and voting.
•Expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
•CFIUS clearance and the approval of the South African Reserve Bank.
•Other customary conditions.
Sibanye's two largest shareholders – Gold One International Ltd. and Public Investment Corporation Ltd., which in aggregate represent 29 percent of Sibanye's issued share capital – have confirmed their support of the transaction, with the closing to occur in the second quarter of 2017.
"This compelling all-cash transaction delivers immediate value to shareholders and appropriately recognizes the value of Stillwater's high-grade and long-life assets and world-class metallurgical and PGM recycling complex, as well as Stillwater's potential for brown field expansions through the development of our Blitz and Lower East Boulder projects," McMullen said in the press release. "This announcement is a testament to the significant operational and productivity improvements that Stillwater has achieved over the past several years. In particular, Sibanye recognizes the world-class nature of our asset base, our operational excellence, our skilled team, and our strong commitment to the environment and workforce safety. Sibanye has indicated its commitment to maintaining and investing in Stillwater's Montana operations and will look to leverage our best practices, industry leading mining expertise and proven ability to drive improvements and efficiencies whilst improving safety across their entire business. I would like to thank the many Stillwater employees whose hard work has transformed the company into a world-class operator with the assets and team able to deliver value over many future decades."