Firestone Diamonds Offer For Kopane Diamond Developments Plc

21st Jul 2010 11:55

TIDMFDI TIDMKDD RNS Number : 6900P Firestone Diamonds PLC 21 July 2010 ? Firestone Diamonds PLC 21 July 2010 21 July 2010 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY SUCH JURISDICTION Recommended All Share Offer by Firestone Diamonds Plc for Kopane Diamond Developments plc (to be effected by means of a Scheme of Arrangement) Highlights · The boards of Kopane and Firestone are pleased to announce today that they have reached agreement on the terms of a unanimously recommended all share offer by Firestone for Kopane on the basis of 0.4657 of a New Firestone Share for every 1 Kopane Share. · The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act and values each Kopane Share at 17 pence, based on a Firestone share price of 36.5 pence. · The Enlarged Group will benefit from a diversified portfolio of production, development and exploration stage diamond projects. The portfolio is expected to provide cash flow from Firestone's new BK11 kimberlite mine in Botswana, significant potential future cash flows from the exploitation of the substantial resource that has been identified at the Main Pipe at Kopane's Liqhobong Project in Lesotho and from Firestone's Jwaneng Tailings Project in Botswana, and significant exploration potential from Firestone's portfolio of 107 other kimberlites in the Orapa and Tsabong kimberlite fields in Botswana. · Liqhobong is believed by the Firestone Directors to be the third largest undeveloped kimberlite resource as measured by contained carats and the fourth largest as measured by resource tonnage, and is considered by the Firestone Directors to be one of the most attractive undeveloped kimberlites in the world. · The Acquisition represents: o a premium of 33.33 per cent. to the Closing Price of a Kopane Share of 12.75 pence on 20 July 2010 (being the Business Day prior to this Announcement); o a premium of 44.68 per cent. to the Closing Price of a Kopane Share of 11.75 pence on 9 February 2010 (being the Business Day prior to the announcement by Kopane regarding a possible offer for Kopane); and o a premium of 42.86 per cent. to the volume weighted average price of a Kopane Share of 11.90 pence over the thirty business days preceding the date of this Announcement. · Based on the current Kopane issued ordinary share capital, the number of New Firestone Shares to be issued in connection with the Acquisition will be 140,413,465. Assuming no further Kopane Shares or Firestone Shares are issued in the period between the date of this Announcement and the Effective Date, immediately following the Effective Date approximately 52 per cent. of the enlarged issued ordinary share capital of Firestone will be held by former Kopane Shareholders and approximately 48 per cent. will be held by existing Firestone Shareholders. · Based on the Kopane Fully Diluted Share Capital, the number of New Firestone Shares to be issued in connection with the Acquisition would be 144,268,053 and were all outstanding Kopane Options to be exercised prior to the Effective Date immediately following the Effective Date approximately 53 per cent. of the enlarged issued ordinary share capital of Firestone would be held by former Kopane Shareholders and approximately 47 per cent. would be held by Firestone Shareholders. · The Acquisition will be conditional on, amongst other things, the approval by Firestone Shareholders and the approval by Kopane Shareholders. · The Kopane Directors, who have been so advised by finnCap, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, finnCap has taken into account the commercial assessments of the Kopane Directors. · The Firestone Directors, who have been so advised by Evolution Securities, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Evolution Securities has taken into account the commercial assessments of the Firestone Directors. · The Kopane Directors intend unanimously to recommend that Kopane Shareholders vote in favour of the Scheme at the Court Meeting and the Kopane Resolution at the Kopane General Meeting. · The Firestone Directors intend unanimously to recommend that Firestone Shareholders vote in favour of the Firestone Resolutions at the Firestone General Meeting. · None of the Kopane Directors hold any Kopane Shares. However, Firestone has received an irrevocable undertaking to vote in favour of the Scheme at the Court Meeting and the Kopane Resolution at the Kopane General Meeting from Obtala, a company associated with Francesco Scolaro, the Chairman of Kopane, which holds directly and indirectly 48,695,000 Kopane Shares representing approximately 16.15 per cent. of Kopane's existing issued ordinary share capital. Firestone has also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Kopane Resolution at the Kopane General Meeting from certain other Kopane Shareholders representing, in aggregate, approximately 19.58 per cent. of Kopane's existing issued ordinary share capital. In total Firestone has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Kopane Resolution at the Kopane General Meeting from Kopane Shareholders representing approximately 35.73 per cent. of Kopane's existing issued ordinary share capital. · Firestone and Kopane have received irrevocable undertakings to vote in favour of the Firestone Resolutions at the Firestone General Meeting from each of the Firestone Directors who hold 2,000,363 Firestone Shares, representing approximately 1.56 per cent. of the existing issued share capital of Firestone. Firestone and Kopane have also received irrevocable undertakings to vote in favour of the Firestone Resolutions at the Firestone General Meeting from certain other Firestone Shareholders representing, in aggregate, approximately 28.27 per cent. of Firestone's existing issued ordinary share capital. In total Firestone and Kopane have received irrevocable undertakings to vote in favour of the Firestone Resolutions at the Firestone General Meeting from Firestone Shareholders representing approximately 29.83 per cent. of Firestone's existing issued ordinary share capital. · The Scheme Document setting out further details of the Acquisition and the procedures to be followed in connection with the implementation of the Scheme will be posted to Kopane Shareholders as soon as reasonably practicable. The Acquisition is expected to be completed on or about 30 September 2010. · For Firestone, the Acquisition constitutes a reverse takeover under the AIM Rules and requires Firestone shareholder approval. An AIM admission document setting out further details of the Enlarged Group and convening the Firestone General Meeting will be posted to Firestone Shareholders as soon as reasonably practicable. James F Kenny, Chairman of Firestone, commented: "We are very pleased with the agreement that we have reached with Kopane, which the Firestone Board will be unanimously recommending to Firestone shareholders for their approval. Firestone recently became one of only three listed kimberlite producers worldwide outside of the major mining companies, and the opportunity to acquire a kimberlite with the potential of Liqhobong is one that we believe complements our broad portfolio of exploration and development projects in Botswana and offers Firestone shareholders very significant benefits. Liqhobong is substantially larger than BK11, is at the final stages of a definitive feasibility study, which is the precursor for mine development, and is considered by the Firestone Board to be one of the most attractive kimberlites that has not yet been commercially developed. The Firestone Board believes that the acquisition of Kopane by Firestone will improve Firestone's prospects and enable the Enlarged Group to become one of the leading mid-tier diamond producers, with the potential to produce in excess of 1 million carats per annum." Frank Scolaro, Chairman of Kopane, commented: "We are delighted with the agreement that we have reached with Firestone, which the Kopane Board will be unanimously recommending to Kopane shareholders for approval. The Kopane Board believes the value that the Offer from Firestone places on Kopane is fair in current market conditions and that the all share Offer will afford Kopane shareholders the opportunity of benefiting from the attractive growth profile of Firestone's substantially broader asset base of diamond projects as well as the likely acceleration of the development of Liqhobong through the Enlarged Group's resources and operational capabilities. The Kopane Board believes that the synergies that can be achieved by combining the two groups will create greater value for shareholders and we look forward to an exciting next phase for the Enlarged Group." Expected timetable of principal events +--------------------------------------------+-------------------+ | Posting of the Scheme Document | 13 August 2010 | +--------------------------------------------+-------------------+ | Posting of Firestone Circular | 13 August 2010 | +--------------------------------------------+-------------------+ (MORE TO FOLLOW) Dow Jones Newswires July 21, 2010 06:55 ET (10:55 GMT)