Artek Exploration (TSX: RTK, Stock Forum) moved to improve its development abilities when the company announced today that it had entered into an arrangement agreement with Kelt Exploration (TSX: KEL, Stock Forum) where Kelt has agreed to acquire all of the issued and outstanding common shares of Artek in a share swap of 0.34 of a common share in Kelt for every Artek share held.
According to the news release, the transaction represents a value of approximately $2.76 per Artek share based on a 5-day volume weighted average trading price of $8.10 per Kelt share immediately preceding the execution of the arrangement agreement.
This also reflects a 61% premium over the 5-day volume weighted average trading price of the Artek shares which values the company at approximately $307 million, including net debt and estimated transaction costs.
Company President and CEO, Darryl Metcalfe, commented on the deal, “This Transaction provides Artek shareholders with a significant premium to the current share price.”
He went on to illustrate, “Artek's Board of Directors and management believe that the world class platform they have built in Northeast British Columbia over the last 5 years with their partner, Kelt, can be more efficiently and rapidly developed in the larger better capitalized combined entity.”
Then concluded, “The business combination with Kelt represents the culmination of Artek's corporate strategy, the principal tenets of which were to build, delineate and de-risk this asset portfolio to the point where the value for our shareholders might be more fully realized in a larger company and Artek believes that merging Kelt's capital access, technical knowledge and history with Artek's resource plays represents an exciting opportunity for Artek shareholders to participate in the future growth of the resulting entity.”
The transaction is still subject to court and regulatory approval with a shareholder meeting expected to take place in mid-April 2015.
Artek Exploration was in the news recently when the Calgary-based company announced significant 2014 reserves growth less than a week ago.
Shares soared 48.57% on the news to $2.60 per shares while shares in Kelt dipped 3.70% to $7.81 per share.
Currently there are 77.9m outstanding shares of Artek with a market cap of $202.4 million.