La Mancha Resources Inc. (TSX:T.LMA, Stock Forum) said that it has entered into an agreement with Weather Investments II S.a.r.l., pursuant to which Weather II has agreed to offer to purchase all outstanding common shares of La Mancha by way of a takeover bid at a price of $3.50 per share in cash.
Weather II is one of the many successful businesses managed by Mr. Naguib Sawiris. The wider Sawiris Family of Egypt have substantial indirect interests in existing operations in the telecoms, construction and fertilizers, cement, real estate and hotel development industries.
La Mancha’s shares shot up over 52% after announcing the agreement with Weather II.
La Mancha is a junior gold mining company with four gold mines in three countries. They currently produce 260,000 ounces of gold annually.
According to the press release, the offer represents a premium of approximately 55.6% to the closing price of the company's common shares on the TSX on July 12, immediately prior to the announcement of the offer and a premium of approximately 43.1% to the 20-day volume weighted average price as at July 12 of the company's common shares on the TSX.
La Mancha's Board of Directors has unanimously determined that the offer is fair to the holders of La Mancha common shares and has agreed to recommend to shareholders that they accept the offer.
Weather II has announced that it intends to commence its offer and to mail its takeover bid circular within 15 business days of the signing of the support agreement.
The offer will be open for acceptance for a period of not less than 35 days. Weather II has committed to take up and pay for the shares within two business days of being obligated to take up the shares.
La Mancha is an international gold producer based in Canada with operations, development projects and exploration activities in Africa, Australia and Argentina.
On Friday La Mancha was trading for $3.43 a share. The company has a market cap of $489 million, based on $142 million shares outstanding. The 52-week high and low was $4.03 and $2.05 respectively.