TORONTO, April 20 - Sherritt International Corporation "Sherritt", S/TSX, and Dynatec Corporation, "Dynatec" - DY/TSX, jointly announced today a transaction whereby under a Plan of Arrangement Sherritt will acquire all of the issued and outstanding common shares of Dynatec for a total value of $1.6 billion.
Under the proposed transaction, Dynatec shareholders will receive 0.190 of a Sherritt common share and approximately 0.0635 of an FNX Mining Company Inc. FNX/TSX common share, which are currently owned by Dynatec, for each Dynatec common share held. Based on yesterday's respective TSX closing prices of $17.15 for Sherritt and $25.46 for FNX, the consideration is valued at $4.88 per Dynatec common share. The consideration represents a premium of 29% to Dynatec's closing share price on April 19, 2007, or a 39% premium based on the 20-day volume weighted average share prices for the three companies from that date.
Sherritt and Dynatec have entered into a combination agreement pursuant to which the Board of Directors of Dynatec has unanimously agreed to support the proposed transaction and recommends that Dynatec shareholders vote in favour of it. Management and Directors of Dynatec have entered into support agreements with Sherritt under which they have agreed to vote 20.2 million common voting shares, representing a 6.4% interest in Dynatec, in favour of the transaction.
Jowdat Waheed, President and CEO of Sherritt, said, "This is an important step in the growth strategy of our Metals division, enabling us to become a premier, globally-diversified lateritic nickel producer based in Canada. The Ambatovy nickel project enhances our already strong Metals operating platform, from which we will be able to meet demand in a growing market."
Bruce V. Walter, President and CEO of Dynatec, added, "This transaction provides an immediate and attractive premium to Dynatec's shareholders. It also affords them an opportunity to participate in an exciting, diversified growth company through their investment in Sherritt, and to have greater exposure to the strong nickel price environment. In addition, the combination of our companies' strengths will benefit the Ambatovy Project as it moves forward with development. Our shareholders will also continue to participate in the significant value potential of the Sudbury Basin through a direct interest in FNX." |
