No sooner had original bidder First Majestic Silver (NYSE: AG ) announced its decision to not raise its bid for Orko Silver (UNKNOWN: OKOFF.DL ) yesterday, than victorious bidder Coeur d'Alene Mines (NYSE: CDE ) confirmed it will proceed to buy Orko itself.
On Wednesday, Coeur announced that it is entering into a definitive agreement to buy all shares outstanding of Orko for C$350 million, or US$344 million.
In claiming his prize, Coeur Chief Executive Officer Mitchell J. Krebs touted the advantages of "Orko's key asset, the La Preciosa silver project in Mexico ... one of the largest undeveloped silver deposits in the world," which "adds a large-scale development opportunity with significant exploration upside to Coeur's portfolio."
As previously described, Coeur's offer gives selling Orko shareholders the option of accepting payment in one of three ways. Assuming 66.67% of Orko shareholders approve the sale in a vote scheduled to take place in April, selling shareholders will be able to trade each Orko share they own for:
- 0.0815 common shares of Coeur and 0.01118 warrants to purchase shares of Coeur (exercisable at a common share strike price of $30), plus $0.70 cash.
- Or 0.1118 common shares of Coeur and 0.01118 warrants (although if too many Orko shareholders opt to be paid in Coeur shares, some shareholders may have to take some cash instead).
- Or $2.60 in cash and 0.01118 warrants -- this time subject to the caveat that if too many Orko shareholders opt to be paid in cash, some may have to accept Coeur shares instead.