It is offering 2 LionGold Corp shares for every 9 Castlemaine shares.
Besides that, LionGold Corp has entered into a Subscription Agreement to subscribe for 11.4% of the enlarged number of shares after the subscription.
Usually I feel that once a party enters into a Subscription Agreement which is not subjected to any precedent conditions, it is more likely that the takeover will happen, as the acquirer has some skin in the game, thus more committed to the cause.
If we price up the deal using Merger Arbitrage Manager,
(there are some limitations as this is a cross border takeover and MA Manager has yet to implement the capability of including FX rates in the deals.. this shall be taken into account for the development of a new version of MA Manager)
It is assumed in this case the FX rates for SGD:AUD is 0.772. The deal should take roughly 3 months to pay out date.
There is a 11% spread to be earned. Usually in a cross-border deal, there is more premium in it unless it is a very big deal where Merger Arb traders around the world would jump on it.
Very possibly though it might be hard to get borrow in the LionGold Corp stock in Singapore, which might explain the massive premium.
The deal is conditional upon 50.1% acceptance, which is a reasonable and not high level. This is not a scheme of implementation thus does not require shareholders to vote.
Adding to portfolio.
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