International Royalty dumps Franco-Nevada offer after Royal Gold's $749 million bid

International Royalty Corporation (IRC), a Colorado-based mining royalty firm, has asked its board to reject an unsolicited C$640 million all-cash offer from Canada's Franco-Nevada since rival bidder Royal Gold has made a superior bid at $749 million.

On 8 December, gold-focused Canadian resource mining royalty company Franco-Nevada launched an unsolicited bid to buy rival Eaglewood, Colorado-based IRC with a portfolio of 85 royalties on projects in five continents and covering commodities such as gold, silver, nickel, copper, zinc, cobalt, coal etc for approximately C$640 million ($608 million) in an all-cash deal. (See: Canadian gold miner Franco-Nevada offers $608 million for International Royalty)

The offer price was C$6.75 per share of IRC, representing a 43 per cent premium to its 4 December closing price on the Toronto Stock Exchange (TSX). IRC has about 93.7 million outstanding common shares.

"Its board of directors has unanimously recommended that IRC shareholders reject the unsolicited offer from Franco-Nevada Corporation as it believes that the Royal Gold Transaction is superior to the Franco-Nevada Offer and more attractive to IRC shareholders," the company said in a statement today.
 
The opportunity to receive Royal Gold shares under the Royal Gold offer provides IRC shareholders with potential benefits not available under the Toronto, Ontario-based Franco-Nevada's offer, the company said.
 
It also said that the Franco-Nevada loose and highly conditional offer cannot be satisfied by IRC and reminded its shareholders that the Franco-Nevada offer is not a "Permitted Bid" under the IRC shareholder rights plan.
 
Royal Gold has offered to acquire all the outstanding IRC common shares for C$7.45 in cash or 0.1385 of a share for each common share of IRC. Royal Gold's bid has a cash cap of $350 million and a limit of 7.75 million common shares.
 
Denver, Colorado-based Royal Gold is a leading precious metals royalty company, which owns and manages royalties on 118 properties in six continents.
 
During the fiscal year ended 30 June 2009, Royal Gold received royalty revenue from 23 producing properties. Royal Gold does not conduct mining operations, but had acquired 72 royalties in October 2008 from Barrick Gold Corporation.
 
IRC's holdings include net smelter returns from the flagship Voisey's Bay nickel-cobalt-copper mine in Canada, Chilean portion of the Pascua-Lama project of gold, silver, copper, Las Cruces copper project in Spain, and about 3.0 million acres of gold lands in Western Australia.