So, what will Perseus Mining (ASX:PRU)
do now that OreCorp and its Canadian suitor, Silvercorp Metals, have changed the type of takeover offer to avoid being trapped in a scheme of arrangement imbroglio?
Perseus snapped up a 19.9% stake in OreCorp in November, which appeared to block Silvercorp's August scheme of arrangement deal (as AustralianSuper did for the Canadian/US bid for Origin Energy in December).
That August deal called for OreCorp shareholders to receive 15 cents in cash and 0.0967 of a Silvercorp common share (valued at 45 cents each) for each OreCorp share held. This represents a total consideration with an implied value of 60 cents per OreCorp share.
But on Monday, the two companies revealed a new deal with the scheme structure replaced by an off-market offer, which will need a 50.01% success level to frustrate Perseus, and not a 75% approval vote from shareholders at the meeting.
The terms are slightly better - the new deal sees Silvercorp offering 19 cents cash and 0.0967 common shares of Silvercorp and $0.19 cash per OreCorp share, four cents higher per share than the scheme deal.
That had little impact on the OreCorp share price, which fell more than 1% to 54 cents.
While that was seen as a signal that the market reckons the Silvercorp offer will prevail, there is also a bit of concern about the Tanzanian government suggesting a new approval arrangement could be needed because the bid structure has changed.
In early November 2023, the Tanzanian Fair Competition Commission (FCC) granted Silvercorp unconditional merger approval for the acquisition of OreCorp under the previously proposed scheme of arrangement.
Since the new agreement between the companies, the FCC has indicated that it will need the opportunity to consider the change of circumstances between the scheme of arrangement and the offer, and new merger approval may be required.
OreCorp and Silvercorp have lodged the relevant documentation seeking the required approval from the FCC, but if approval is not granted, the offer will not be able to be completed.
(That could be why the market was hesitant on Monday after the announcement.)
But both companies are confident in the likelihood that the new structure will be successful.
"The parties have been through the FCC approval process during the scheme of arrangement and have a positive working relationship with the FCC, as well as relevant government authorities," OreCorp said on Monday in a statement to the ASX.
OreCorp CEO Henk Diederichs was quite open about why the bid structure was changed.
"It became clear in recent weeks that the proposed scheme was at risk of not proceeding to completion," he said on Monday, without mentioning Perseus's 19.9% stake and its potential to frustrate the deal.
"We believe this would have prevented OreCorp shareholders from having the opportunity to receive a significant premium on their OreCorp shares and exposure to a company that is geographically diverse, with a strong balance sheet and solid mine building and operational experience.
"This new Silvercorp offer provides shareholders with a level of certainty, and the board believes this is an excellent outcome."
Perseus is much bigger than either company, with a market cap of $A2.4 billion. OreCorp is valued at just over $A400 million, and Silvercorp at around $A660 million.
Could Perseus accept the new offer and use the shares to be issued to it as the basis to stalk the merged company?