Silver Lake hikes EganStreet bid

Silver Lake Resources has substantially improved the terms of its scrip takeover bid for EganStreet Resources, which disclosed today it had been approached by Adaman Resources with a competing cash offer.

Silver Lake said it would offer 0.431 of its own shares for each EganStreet share, if it obtained at least 38 per cent of its takeover target.

If acceptances fall short of that level, it will offer 0.400 shares.

That is still a big lift from the original offer of 0.27 Silver Lake shares per EganStreet share.

The value of the original bid waned substantially after Silver Lake’s share price fell from around $1.50 at the time of the announcement.

With Silver Lake shares closing today at $1.185, its latest offer is worth around 51 cents per EganStreet share, or $68 million in total.

Silver Lake currently has a 31.6 per cent interest in EganStreet, including acceptances from the board of directors and EganStreet’s largest shareholder, Lion Selection Group. 

Once it receives a relevant interest of at least 38 per cent, Silver Lake intends to declare the offer immediately unconditional and pay the consideration within seven days.

Earlier today, EganStreet said Adaman had proposed an indicative takeover proposal pitched at 40 cents cash per share.

It was subject to a number of conditions, including a $60 million loan facility with Remagen Capital Management and completion of due diligence.

EganStreet said that in light of the higher Silver Lake offer, it would cease discussions with Adaman.

The directors also reaffirmed their support for the Silver Lake offer.