Alacer Gold and SSR Mining have announced a merger, whereby Alacer Gold shareholders will receive 43% of the equity in the combined business.
No quantitative synergy benefits were highlighted by management, beyond $5-10m in office costs.
UBS notes both companies have strong balance sheet and the main benefits of the merger would probably stem from a lower cost of capital.
The broker retains a Buy rating and $9.50 target.
Sector: Materials.
Target price is $9.50.Current Price is $8.47. Difference: $1.03 – (brackets indicate current price is over target). If AQG meets the UBS target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
