Disgruntled bondholders, a royalty holder to appease, a hostile foreign shareholder: those are some of the issues that made Centerra Gold’s US$1.1-billion takeover of Thompson Creek Metals one of 2016’s most challenging deals.
“This is one that we’ll talk about for many years,” said Jason Neal, co-head of global mining and metals at BMO Capital Markets, the bank that acted as both advisor to the seller — Thompson Creek — and lead financier for the buyer — Centerra.
“It’s highly atypical for the sell side advisor to be top left for the buyer financing — I can’t think of another example in mining.” The deal may have been a particular score for BMO, but all of the bankers involved in getting it done believe it generated a unique string of wins for several parties concerned.
In mid-2015, commodity prices were in the doldrums as the clock was ticking down toward a 2017 repayment date for the first instalment of debt Thompson Creek had amassed to develop its Mount Milligan copper-gold mine in British Columbia. The company had few options but to try and refinance or put itself on the auction block.
Thompson Creek, whose shares had traded at $25 at a 2007 peak, had become a penny stock. It hired the Bank of Montreal to pursue merger and acquisition opportunities and gave interested parties until Apr. 18, 2016 to submit proposals.
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