TORONTO, ONTARIO -- (Marketwire) -- 12/13/12 -- Rio Verde Minerals Development Corp. (TSX: RVD) ("Rio Verde" or the "Company") and B&A Mineracao S.A. ("B&A") are pleased to announce that they have entered into a definitive agreement (the "Arrangement Agreement") pursuant to which B&A will acquire all of the issued and outstanding common shares of Rio Verde (the "Rio Verde Shares") (other than the Rio Verde Shares it currently owns) by way of a statutory Plan of Arrangement under the BVI Business Companies Act, 2004 or otherwise (the "Arrangement") at a price of CAD $0.40 per share in cash (the "Consideration").
The transaction price represents an unaffected premium of 56% to the 20-day volume weighted average trading price of the Rio Verde Shares on the Toronto Stock Exchange as of November 30 2012, the day before the announcement of the transaction discussions, and values Rio Verde's equity at approximately C$48.6 million. Upon closing of the transaction, B&A intends to advance the Bonito and Sergipe projects through the design, construction and operational phases of its development.
Rio Verde's Board of Directors, based on the recommendation of a special committee of independent directors (the "Special Committee"), has determined that the Arrangement is fair, and has unanimously recommended that Rio Verde's shareholders vote in favour of the Arrangement. Canaccord Genuity Corp. ("Canaccord Genuity"), an independent valuator to the Company and its Board of Directors, is of the opinion that, based upon and subject to certain assumptions, limitations, and qualifications, the Consideration is fair, from a financial point of view, to Rio Verde's shareholders, other than B&A. In addition, under the supervision of the Special Committee, Canaccord Genuity has prepared an independent valuation and has provided an oral opinion that, based upon and subject to the assumptions, limitations, and qualifications in such opinion, as at December 13, 2012, the fair market value of the Rio Verde Shares is in the range of $0.35 to $0.45 per Rio Verde Share.
Executive officers and directors of Rio Verde as well as shareholders representing approximately 25% of the outstanding Rio Verde Shares have entered into lock-up and support agreements with B&A under which they have agreed to vote in favour of the Arrangement.
The Arrangement Agreement is subject to customary representations, warranties and covenants of each of Rio Verde and B&A. In addition, Rio Verde has agreed that it will not solicit or initiate discussions concerning the pursuit of any other acquisition proposals except in respect of unsolicited proposals that the Rio Verde Board of Directors in good faith determines could reasonably be expected to result in a superior proposal. The Arrangement Agreement gives to B&A the right to match superior proposals and contains a termination fee of C$2.0 million payable in certain circumstances.
The terms and conditions of the Arrangement will be summarized in the Company's management information circular, which will be filed and mailed to Rio Verde's shareholders in mid-January 2013. Shareholders will be asked to approve the Arrangement at a meeting to be held in mid-February 2013.
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