MIXED VIEWS - IMG BUYOUT OF VANSTAR RESOURCESHere’s some interesting dialogue going on regarding IAMGOLD’s proposed buyout of Vanstar Resources.
On December 5, 2023, IAMGOLD Signs Agreement to Acquire Vanstar Resources. A special meeting of holders of common shares (the “Shareholders”) of Vanstar Mining Resources Inc. (“Vanstar”) will be held on February 6, 2024 in Montreal. The offer by IAMGOLD Corporation (“IAMGOLD”) is that the company will acquire all of the issued and outstanding common shares of Vanstar (the “Shares”) in exchange for 0.2008 of a common share of IAMGOLD for each Share. Assuming an IMG share price of $3.45 on closing, Simple math 0.2008 x $3.45 =0.69 cents. Some shareholders are unhappy with the offer saying it’s too low and they want a much higher price. Some want 0.40 times IAMGOLD share price $1.38 a share or even higher for each IMG share! This group of shareholders have already voted an astounding “NO”. The final price could be higher or lower than 0.69 cents.
According to Renaud Adams, President and Chief Executive Officer of IAMGOLD, he believes that a fair price is on the table and "This transaction consolidates our interests in the highly prospective Nelligan deposit while building our exploration portfolio within Northern Quebec," commented. "Our exploration efforts at Nelligan to date, in partnership with Vanstar, have shown the potential for further resource expansion which we will continue to advance. While this transaction bolsters our Canadian exploration portfolio, the priority for IAMGOLD today remains focused on the successful commissioning, ramp up and growth of Ct Gold in Ontario. Ct is a project that is critical for the repositioning of this company, as once online, IAMGOLD will have a significantly higher production base and lower cost profile, providing a strong foundation of cash flow and growth opportunities in Canada."
Some shareholders expect the sale will go through just based on previous M&A in which the public complained but it happened nevertheless....
Another shareholder who was vocal stated, “That he fully expects the offer from IMG for VSR will be approved next week and that the vote won't even be close. Having read the meeting package, I am a bit confused on why anyone would even consider voting no.”
Voting in favor of the transaction provides the option to own IMG shares, potentially benefiting from an increasing gold price, production start-up at Cote, future development of the Nelligan, and owning a liquid stock.
There are certainly some mixed views on this buyout, but the issue will be resolved on Tuesday, February 6, 2024.