It's an implied price based on where SLR was trading pre-announcement ($2.84 from memory). The merger is a script scheme at 6.28 IGR shares for 1 SLR share; as is usually the case with a script deal, the market rebalances post announcement, so the implied value changes (SLR dropped 10%+ to mid $2.50s or so) - it would now be closer to around 40c.
Remains to be seen as to whether there would be any adjustment to the scheme ratio, but unlikely unless a higher bid.
As an owner of both SLR and IGR, this makes strategic sense, and IMO there will be more mergers during 2012 in the sector. In this market, time to get big or get crushed. Reflecting over the share price movements over last 9 months, IGR high Nov 11 around 62c vs SLR high Nov 11 around $3.80 shows a similar ratio around that time, and the whole sector has been hammered since, especially in the last 3 months. All shareholders will still get to participate in the upside when market sentiment turns, unless they choose to sell on market rather than accept new shares.
GLTA
IGR Price at posting:
39.0¢ Sentiment: Hold Disclosure: Held
