Rick Rule's 14% stake in Spur has been bought out by another firm months ago, the big question is now what is he going to do with it?

Sell or increase his SVU holding?




Toronto asset manager Sprott Inc. said Wednesday it has agreed to an all-share deal to purchase a trio of Californian natural resource investment managers with combined client assets of US$1.3-billion.

Sprott's deal for Global Resource Investments Ltd., Terra Resource Investment Management Inc. and Resource Capital Investments Corp. involves Sprott issuing a total of 20 million shares to Rick Rule and the Rule Family Trust, the owners of the companies. If the companies meet certain performance thresholds in the next five years, Sprott may issue as many as 8 million additional shares.

Investors are reacting positively to the news, sending Sprott shares up almost 8% to $4.85 on the Toronto Stock Exchange in mid-morning trading. This bumps the value of the deal to more than $90-million.

"Sprott's culture of performance mirrors our own, and as a result the combination will serve both our clients well," Mr. Rule said in the release. "We also believe that the global companies can provide an ideal footprint for Sprott's U.S. expansion."

As part of the agreement, Mr. Rule will join Sprott's executive management team for a minimum three-year term, and will be nominated for election as a director at the company's next annual meeting.

"Rick Rule and his team are widely respected experts in the field of natural resource investing," Eric Sprott, chairman of Sprott, said in a release.

Peter Grosskopf, chief executive with Sprott, said the transaction will increase Sprott's assets under management by almost US$500-million while growing overall assets under administration by more than US$850-million.

The deal is expected to be immediately accretive to shareholders, he said.

The companies work through pooled investment vehicles, managed accounts and brokerage accounts.



Read more: https://www.financialpost.com/news/Sprott+buys+three+investment+managers/3561676/story.html#ixzz168C24fsT