Congrats to those who held on to their stocks
ORKO ANNOUNCES SUPERIOR PROPOSAL
VANCOUVER, BC, CANADA – Orko Silver Corp. (“Orko” or
the “Company”)
(TSX-V: OK; Frankfurt: OG3; OTCUS: OKOFF) announces that
it has received a binding proposal from Coeur d’Alene Mines Corporation (“Coeur”) for the
acquisition by Coeur of all of the issued and outstanding common shares of
Orko (the “Orko Shares”)
by way of a plan of arrangement (the “Coeur
Proposal”). The Board of Directors of Orko (the “Orko Board”) has
unanimously determined, after receiving the advice of its financial and legal
advisors, that the Coeur Proposal constitutes a “Superior Proposal” pursuant
to the arrangement agreement between Orko and First Majestic Silver Corp. (“First Majestic”)
originally announced on December 16, 2012 (the “First Majestic Agreement”)
and has provided notice of such determination to First Majestic.
Under the terms of the Coeur Proposal, Orko shareholders may elect to
receive in exchange for each Orko Share:
- · 0.0815
common shares of Coeur (“Coeur
Shares”) and C$0.70 cash and 0.01118 warrants to
purchase Coeur Shares (“Coeur
Warrants”);
- · 0.1118
Coeur Shares and 0.01118 Coeur Warrants, subject to pro-ration as to the
number of Coeur Shares if the total number of Coeur Shares elected by
Orko shareholders exceeds approximately 11.6 million; or
- · C$2.60
in cash and 0.01118 Coeur Warrants, subject to pro-ration as to the
amount of cash if the total cash elected by Orko shareholders exceeds
C$100 million.
If all Orko shareholders were to elect either the all cash (and Coeur
Warrants) or the all share (and Coeur Warrants) alternative, each Orko
shareholder would receive 0.0815 Coeur Shares and C$0.70 in cash, together
with 0.01118 Coeur Warrants, for each Orko Share. Each whole Coeur
Warrant will be exercisable for one Coeur Share for a period of four years at
an exercise price of US$30.00, all subject to adjustment in accordance with
the terms of the Coeur Warrants.
Based on the closing price of Coeur Shares on the New York Stock
Exchange (“NYSE”)
on February 12, 2013 (and $0.08 of warrant value per Orko Share), the Coeur
Proposal implies a value of C$2.70 per Orko Share. The Coeur
Proposal represents a premium of approximately 25% to the implied value of
the consideration offered pursuant to the First Majestic Agreement based on
the February 12, 2013 closing price of both Coeur and First Majestic’s common
shares on the NYSE and Toronto Stock Exchange, respectively.
Except for the consideration being offered, the agreement proposed by
Coeur is substantially similar to the First Majestic Agreement, including
with respect to the treatment of outstanding options to purchase common
shares of the Company. The proposed agreement with Coeur includes a
termination fee, payable to Coeur in certain circumstances, of C$11.6
million, consistent with the termination fee payable to First Majestic under
the First Majestic Agreement.
Under the terms of the First Majestic Agreement, First Majestic has a
period of five business days, expiring at 11:59 pm PT on Tuesday, February
19, 2013 (the “Response
Period”), during which to offer to amend the terms of that
agreement.
If, within the Response Period, First Majestic offers to amend the
First Majestic Agreement such that the Orko Board determines that the Coeur
Proposal is no longer a Superior Proposal, Orko will be required to enter into
an amendment to the First Majestic Agreement and implement the amended
agreement. In that circumstance, no agreement will be entered into between
Orko and Coeur with respect to the transaction proposed by Coeur.
If, within the Response Period, First Majestic does not offer to amend
the First Majestic Agreement, or if the proposed Coeur transaction continues
to be a Superior Proposal following a proposed amendment to the First
Majestic Agreement by First Majestic, Orko intends to pay First Majestic the
agreed termination fee of C$11.6 million, terminate the First Majestic
Agreement and enter into the agreement proposed by Coeur. In that
event, the directors and officers of Orko will enter into lock-up agreements
with respect to the transaction proposed by Coeur (on substantially the same
terms as the lock-up agreements they entered into with First Majestic)
pursuant to which, among other things, they will agree to vote in favour of
the transaction proposed by Coeur at a special meeting of securityholders of
Orko to be called to consider such transaction.
In conjunction with the Coeur Proposal, Coeur has proposed to provide
Orko with an C$11.6 million convertible loan to
finance the First Majestic termination fee (the “Coeur Loan”). Orko
would enter into the Coeur Loan concurrently with the execution of the
agreement proposed by Coeur.
