St Barbara says no deal to Silver Lake

St Barbara’s board has told shareholders there is no material improvement in Silver Lake Resources’ latest proposal to buy Gwalia and can’t see a realistic pathway that it could become superior.

Responding to another submission from Silver Lake Resources, St Barbara chair Kerry Gleeson said her board had made it clear that Silver Lake’s proposal fell ‘a long way short’ of something that could be considered a superior proposal.

As of Thursday, the gold developer is still offering $370 million in cash and 327.1 million Silver Lake shares, which it said were valued at $348.2 million but highlighted that a major acquisition facility had progressed to the point where it was only subject to due diligence.

St Barbara has not been willing to progress to that stage, knocking back two proposals from the company.

Silver Lake is pitching against a frontrunning offer from Raleigh Finlayson's Genesis Minerals to buy the group's Leonora assets. 

Responding today Ms Gleeson said the board had entertained three ‘genuine’ parties – which included ASX-listed gold company  Red 5 – which had led to the Genesis transaction.

“St Barbara entertaining Silver Lake’s demands for due diligence at this late stage, would de-rail the Genesis transaction - and Silver Lake could still walk away at any time,” she said.

There’s also the matter of St Barbara’s debt convenants, which the company has said it risks breaching if it doesn’t enter the deal with Genesis to extinguish its senior debt and lease liabilities.

“We won’t trade certainty for an immaterial premium that might amount to nothing. That is not a risk we are prepared to take for our shareholders or the company.”

Major St Barbara shareholder L1 Capital is still understood to be in favour of entertaining the Silver Lake proposal, meanwhile it's believed Baker Steel - owning about 8.6 per cent - is inclined to vote in favour of the Genesis transaction.

Shareholders are due to vote on the deal on June 20.