Pala Investments has signed an agreement to acquire 100% of Cobalt 27 Capital for a total consideration of approximately £297m.
Pala will buy all the shares of Cobalt 27 other than the 19% that it already owns.
Cobalt 27 CEO and chairman Anthony Milewski said: “We believe this is a highly compelling offer for Cobalt 27, as the transaction provides shareholders with a large upfront premium.
“It is also clear that nickel will be an increasingly critical component of the electric battery revolution, and the creation of Nickel 28 provides shareholders with significant incremental value and continued exposure to the strong fundamentals of battery metals.”
Under the transaction terms, Cobalt 27 shareholders are expected to receive £3 per common share, where comprised of C$3.57 in cash plus C$2.18 in shares of a newly listed company Nickel 28.
Cobalt 27 said that Nickel 28 is created to hold its joint venture interest in Ramu, a producing, long life, low-cost, nickel-cobalt mine.
It will hold royalties relating to the Dumont, Turnagain, Flemington, Nyngan, Triangle, Rusty Lake, Professor & Waldman, North Canol and Sunset properties.
At inception, Nickel 28 will be funded with £4m in cash and no corporate debt. The company believes that Nickel 28 would continue to provide shareholders with direct exposure to the electric vehicle market through nickel and cobalt exposure.
Pala intends to retain a 4.9% interest in Nickel 28, and the current leadership team of Cobalt 27 is expected to continue as the board and management of Nickel 28.
Pala managing partner Stephen Gill said: “As a long-term investor, this transaction is aligned with our strategy of building sustainable value chains around the raw materials that support a changing economy.
“We look forward to remaining a supportive shareholder of Nickel 28, as it goes forward with a clean balance sheet to continue building its asset base, in particular, by leveraging its recently acquired exposure to the producing Ramu nickel-cobalt mine”.
