Gold Royalties bids for Elemental Royalties

Gold Royalties (NYSE-AM: GROY) is proposing to acquire Elemental Royalties (TSXV: ELE) in an all-share deal valued at $130 million.

Gold Royalties said it is taking its offer directly to Elemental’s shareholders, after its two previous approaches to the junior — the first on October 21 and the second on December 15 — failed  to engage Elemental’s board of directors, the company said in a December 20 news release.

The latest offer — 0.27 common shares of Gold Royalty for every one share of Elemental Royalties — values Elemental at $1.78 per share, a 37% premium to Elemental shareholders based on the closing share prices of each company on December 17. Gold Royalties noted in a press release that the $1.78 per share offer exceeds Elemental’s peak share price in 2021.

If the transaction is approved, Elemental shareholders will own about 12% of the combined company.

“Gold Royalty has completed three acquisitions in 2021, and in each case the implied premium paid is higher today than at the time of the transaction announcements due to the strong performance of the Gold Royalty shares, which could further enhance the ultimate premium realized by Elemental shareholders,” Gold Royalty stated in its press release. Its three previous acquisitions were: Ely Gold Royalties, Abitibi Royalties, and Golden Valley Mines and Royalties.