Molycorp (MCP) to Acquire Neo Materials in C$1.3B Deal
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Molycorp, Inc. (NYSE: MCP) and Neo Material Technologies Inc., have signed a definitive agreement under which Molycorp will acquire Neo Materials for approximately CDN $1.3 billion. This will create one of the most technologically advanced, vertically integrated rare earth companies in the world.
Under the agreement, which was unanimously approved by the two companies’ boards of directors, Neo Materials shareholders will receive consideration equal to CDN$11.30 per share, comprising of CDN$8.05 per share in cash and 0.122 Molycorp shares based on Molycorp’s 20–day volume weighted average price of US$26.66. Neo Materials shareholders will have the right to elect their preferred consideration mix of cash and newly issued Molycorp common stock, with the total consideration being approximately 71.2 percent cash and approximately 28.8 percent Molycorp common stock. The CDN$11.30 per share represents a premium of approximately 42 percent to Neo Materials’ closing share price of CDN$7.97 on March 8, 2012.
The transaction is expected to close in the second or third quarter of 2012.
Molycorp intends to finance the majority of the cash portion of the consideration, and has obtained a committed financing facility from Morgan Stanley and Credit Suisse. Permanent financing is expected to include long-term debt, existing cash on hand of the combined company, and the proceeds from any equity issuances. Funds allocated to Project Phoenix Phase 1 and Phase 2 will not be used for this transaction.
Under the agreement, which was unanimously approved by the two companies’ boards of directors, Neo Materials shareholders will receive consideration equal to CDN$11.30 per share, comprising of CDN$8.05 per share in cash and 0.122 Molycorp shares based on Molycorp’s 20–day volume weighted average price of US$26.66. Neo Materials shareholders will have the right to elect their preferred consideration mix of cash and newly issued Molycorp common stock, with the total consideration being approximately 71.2 percent cash and approximately 28.8 percent Molycorp common stock. The CDN$11.30 per share represents a premium of approximately 42 percent to Neo Materials’ closing share price of CDN$7.97 on March 8, 2012.
The transaction is expected to close in the second or third quarter of 2012.
Molycorp intends to finance the majority of the cash portion of the consideration, and has obtained a committed financing facility from Morgan Stanley and Credit Suisse. Permanent financing is expected to include long-term debt, existing cash on hand of the combined company, and the proceeds from any equity issuances. Funds allocated to Project Phoenix Phase 1 and Phase 2 will not be used for this transaction.
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