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Sirius-ly complex deal keeps shareholders happy

Sirius-ly complex deal keeps shareholders happy

Roger Davies

Global firms have advised in relation to the acquisition and demerger of a major resources company.

Firms: Ashurst (Sirius Resources NL); Herbert Smith Freehills (IGO)

Deal: Sirius and IGO have entered into a Scheme Implementation Deed by which IGO will acquire all the issued capital of Sirius. Sirius will undertake a demerger of its Polar Bear and Scandinavian assets, including the recently discovered Baloo gold deposit. 

Shareholders will also benefit from retaining exposure to Sirius’ world-class Nova-Bollinger nickel/copper development project, which is fully financed, currently under construction and remains on track to be generating significant cash flow from 2017.

Value: $1.8 billion, with the IGO/Sirius MergeCo valued at $2.7 billion

Area: M&A

Key players: Ashurst corporate partner Roger Davies (pictured) led the deal, with support from partner Adam Conway.

Deal significance: Through the use of a complex transaction structure involving inter-conditional acquisition and demerger schemes of arrangement and a capital reduction, Sirius has achieved a good outcome for its shareholders, including retaining an interest in the Nova-Bollinger project, gaining exposure to a dividend-paying production company in IGO, as well as an ongoing interest in certain of Sirius' exploration assets through S2 Resources, a new vehicle to be listed on the ASX. 

"This represents the culmination of Sirius' strategy in relation to its world-class Nova-Bollinger project,” said Mr Davies.

"It has been a pleasure to again assist Sirius with such a complex and transformational deal, which used a novel transaction structure to achieve the desired commercial outcomes and maximise shareholder value."

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