Dundee Precious Metals agrees to acquire Adriatic Metals

(Sharecast News) - Dundee Precious Metals has agreed to acquire Adriatic Metals in a recommended share and cash deal, valuing the London- and Sydney-listed miner at $1.25bn. Under the terms of the offer, Adriatic shareholders would receive 0.1590 new DPM shares and 93p in cash for each Adriatic share, representing a value of 268p per share based on DPM's closing price of CAD 20.33 on 11 June.

The deal implied a 50.5% premium to Adriatic's closing price in London on 19 May, before the start of the offer period.

Adriatic said the offer would be implemented via a UK court-sanctioned scheme of arrangement, and include a mix and match facility, although the total consideration - comprising £321m in cash and 54.9 million new DPM shares - would not vary.

Upon completion, existing DPM shareholders would hold 75.3% of the enlarged group, with Adriatic investors owning the remaining 24.7%.

DPM, which operates mining assets in the Balkans, said the acquisition of Adriatic and its Vareš silver project in Bosnia and Herzegovina aligned with its strategy to build a diversified, cash-generative portfolio of precious metals assets.

It expected the transaction to be accretive to cash flow per share in the first year post-completion.

DPM also pointed to financial flexibility, supply chain optimisation, and shared operational synergies as key drivers of value in the combined group.

The acquisition would enhance DPM's development pipeline and reduce reliance on third-party financing, with Vareš expected to contribute significantly to future production and cash flow.

Irrevocable undertakings to vote in favour of the scheme had been received from Adriatic directors and major shareholders including Helikon Investments and L1 Capital, which collectively hold 37.2% of Adriatic's shares.

The boards of both companies unanimously recommended the transaction.

"The Vareš Silver Operation remains on track to become a low cost precious metal producer, underpinned by a long mine life, a high-grade deposit and strong exploration potential," said Adriatic Metals chief executive officer Laura Tyler.

"What makes Vareš so exciting is that it is at the beginning of its journey, with significant growth ahead.

"This transaction brings together complementary strengths to create a dynamic and diversified mining company with meaningful scale."

Tyler said the combined group would be "well placed" to pursue additional value-additive opportunities.

"We see clear synergies between the asset portfolios of DPM and Adriatic, supported by DPM's strong financial capacity and proven operational expertise.

"Together these strengths are expected to unlock further value for shareholders of both companies, in both the near and longer term."

Laura Tyler said importantly, the creation of a diversified mining company in the Balkan region would bring benefits to both employees and shareholders, as well as to local communities and broader regional stakeholders.

"This transaction presents a compelling opportunity to be part of a transformative and long-term success story - one we fully endorse and recommend to all our stakeholders."

At 1001 BST, shares in Adriatic Metals were up 4.15% at 251p.

Reporting by Josh White for Sharecast.com.