Fortuna Silver (FSM) shares fell 21.8% last week on news of the Roxgold acquisition. As we already pointed out (see previous update), this is a solid acquisition for Fortuna. However, the share price decline has created a situation wherein Roxgold closed 5 cents below the implied acquisition price. The lack of a competing bid until now indicates that Fortuna offered a fair premium and potential suitors do not see any upside in bidding higher, especially after factoring in the C$40 million termination fee Fortuna will be entitled to, in case of a higher bid.
Either way, it increases the likelihood that Roxgold shareholders vote in favour of the deal. If so, picking up Roxgold shares (ROXG:TSX) now could get you an even cheaper entry into Fortuna. If there is a competing bid, it will have to be at a much higher price, which makes buying Roxgold practically a no-lose situation.
Either way, it increases the likelihood that Roxgold shareholders vote in favour of the deal. If so, picking up Roxgold shares (ROXG:TSX) now could get you an even cheaper entry into Fortuna. If there is a competing bid, it will have to be at a much higher price, which makes buying Roxgold practically a no-lose situation.