Intergeo MMC Ltd. agreed to acquire Mercator Minerals Limited (TSX:ML) in a reverse merger transaction.
The agreement also provides for the payment of a termination fee of $6 million to Intergeo if the transaction is terminated in certain specified circumstances. The Board of Directors of comined company will be comprised of John Lill, Maxim Finskiy, Mike Salamon, Richard Evans, Patrick Garver, Walter Murray, Dmitry Razumov, John Bowles and Christophe Charlier. John Lill, Chief Executive Officer of Intergeo, is expected to be the Chief Executive Officer of the combined company. The Borad of Directors of unanimously Mercator approved the transaction. The transaction is subject to approval of Mercator shareholders, Supreme Court of British Columbia, third party approvals and regulatory approvals. As on April 7, 2014, a total of 43.2% of shareholdes of Mercator Minerals Limited voted in favour of the transaction. It is anticipated that the transaction will be completed in second quarter of 2014. Mercator and Intergeo responded to a request for information regarding the terms and conditions of the arrangement from the Russian Federal Anti-Monopoly Services as on April 17, 2014.
On April 29, 2014, The transaction closing has been postponed to May 30, 2014 and, in certain circumstances, up to August 1, 2014 to provide the Russian Federal Anti-Monopoly Services with additional time to complete its review of the response provided by Mercator and Intergeo to its request for information regarding the terms and conditions of the Arrangement. As June 12, 2014, Mercator Minerals extended the completion deadline of transaction to June 30, 2014 and in certain circumstances, up to August 1, 2014. Daselina, agreed to increase the commitment under the bridge loan advanced by Daselina in connection with the arrangement by an additional $2 million (to $16 million) on May 1, 2014 and by an additional $2 million (to $18 million) on June 1, 2014 if the arrangement has not yet been completed by these dates. If and when the commitment under the bridge loan is increased to $16 million, 8.7 million additional warrants will vest such that, Daselina would be able to exercise 59.6 million warrants representing 15.9% of the outstanding Mercator common shares on a partially diluted basis. If and when the commitment under the bridge loan is increased to $18 million, 9.1 million additional warrants will vest such that, Daselina would be able to exercise 68.8 million warrants representing 17.9% of the outstanding Mercator common shares on a partially diluted basis. The amendments to the agreements are subject to the completion of applicable documentation and the receipt of any necessary approvals and consent. As on July 3, 2014, Russian Federal Anti-Monopoly Services requested a two-month extension to review and approve the merger.
John Armstrong and Jamie Rogers of BMO Nesbitt Burns, Inc. acted as financial advisors to Mercator. Lucy H. Schilling and Corey M. Dean of DuMoulin Black LLP and Bahar Hafizi of Blake, Cassels & Graydon LLP acted as legal advisors to Mercator. Jay Kellerman, Amanda Linett, Andrew Bozzato, Warren Ng, Nasim Jamasbi, Shawn Neylan, John Lorito and Katy Pitch, Larry Cobb, Kathleen Chevalier and Natasha Vandenhoven of Stikeman Elliott LLP acted as legal advisors to the special committee of the board of directors of Mercator. Morgan Stanley & Co. LLC acted as financial advisor to Intergeo. Marvin Singer, Michael Sabusco, Kevin Ackhurst, Jim Rumball, Ed Heakes, Robert Eberschlag, Steven Suzzan, Larry Franceski, Warren Nimetz, Jennifer Armstrong and Alex Liszka of Norton Rose Fulbright acted as legal advisors to Intergeo. Renaissance Capital acted as financial advisor to Daselina. Dorsey & Whitney LLP acted as the legal advisor to Mercator Minerals Limited. Georgeson Shareholder Communications Canada, Inc. acted as information agent to Mercator and received a fee of $25,000 for its services. Computershare Investor Services Inc. acted as registrar and transfer agent to Mercator.