Excellon, Otis Gold get proxy firm backing for merger
Independent proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis & Co. have each recommended that shareholders of Excellon Resources (TSX: EXN) and Otis Gold (TSXV: OOO) approve the proposed merger between the companies.
In February, Excellon announced its intention to acquire fellow Canadian precious metals miner Otis Gold in an all-share deal worth approximately $32.3 million.
ISS and Glass Lewis said that the proposed transaction makes sense for Excellon shareholders as the combined entity would have a more diversified portfolio of assets, consisting of Excellon’s high-grade Platosa silver mine in Mexico and Otis’ Kilgore gold development project in Idaho.
The proxy firms also said that the combined entity would have more diversification across metals types, geographies, project type and project stage, with $10 million in cash and available funds to deploy.
For Otis shareholders, the arrangement “makes strategic sense” given the significant implied premium and the going concern risk facing the company.
ISS and Glass Lewis noted that shareholders can still participate in potential upside developments and future growth opportunities of the combined business by receiving Excellon shares.