In today’s briefing:
- Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs
- OreCorp (ORR AU): Silvercorp Switches to a Takeover Offer to Counter Perseus
Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs
- On 27 December, Kum Yang announced that its shares will be listed on the US stock market in the form of DRs, resulting in its shares rising by 11.7%.
- The listing of Kum Yang ADRs is likely to have a short-term positive impact on its share price as this is likely to reduce free float of local common shares.
- Nonetheless, over the next 6-12 months, we expect Kum Yang’s share price to trade much lower (30% or more) as its shares are highly overvalued.
OreCorp (ORR AU): Silvercorp Switches to a Takeover Offer to Counter Perseus
- Silvercorp Metals (SVM US) has switched to an off-market takeover offer. The Orecorp Ltd (ORR AU) consideration remains unchanged at A$0.19 cash and 0.0967 SVM shares per ORR share.
- The takeover offer is conditional on a 50.1% minimum acceptance condition, achievable in the absence of a superior proposal.
- The crucial question is whether Perseus Mining (PRU AU) is comfortable with SVM effectively controlling ORR. We think that there is a low probability of Perseus launching a competing proposal.
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