OreCorp shareholders position to frustrate takeover by Silvercorp

afr.com:

There’s nothing like a looming scheme meeting to put the cat among the pigeons.

Street Talk understands that influential shareholders in ASX-listed gold developer OreCorp are growing increasingly dissatisfied with Silvercorp Metals’ proposed takeover deal.

OreCorp is focused on exploring for base and precious metals in Africa. 

OreCorp signed a binding scheme implementation deal with Silvercorp in August under which the Toronto-listed, China-focused precious metals company would acquire the remaining shares of the $230 million market cap miner that it didn’t already own. Shareholders would receive 15¢ in cash and 0.0967 of a Silvercorp common share, valued at 45¢ for each share held, putting the total deal size at 60¢.

Silvercorp also agreed to stump up $28 million in fresh funding via an equity placement to help with the development of OreCorp’s key Nyanzaga open-pit Gold Project in north-west Tanzania.

The board unanimously recommended that shareholders back the scheme at a vote on December 8 in Perth and the independent expert BDO Corporate Finance has given the scheme a tick of approval, describing it as “fair and reasonable and in the best interest of OreCorp shareholders”.

Sources told Street Talk that although shareholders were initially pleased with the headline price – then a 42 per cent premium to OreCorp’s 20-day volume-weighted average price – they’ve since watched Silvercorp’s stock fall about 15 per cent. As such, they’re questioning the merits of the transaction and the value of Silvercorp scrip.

The sources said there was concern in the OreCorp camp that shareholders who had little interest in holding a TSX-listed silver, zinc and lead producer with Chinese assets and limited Africa expertise would look