A golden deal.
SILVER Lake Resources finally closed the book on its gold-spinning options deal that last year saw Macquarie Group lock in a very nice book profit and directors reap some early benefits.
Back in mid-September, the successful West Australian gold producer quietly announced a series of changes in directors' interests that involved the sale of 6.6 million out of 24 million deep-in-the-money unlisted options granted to them in 2007 before the company was listed.
The deal was that each of the six Silver Lake directors disposed of 1.1 million options at $2.35 each, on condition that the institutional buyers immediately exercise them so the company received the benefit of the capital raising.
While the deal was done, what Silver Lake forgot to do was file the necessary ''cleansing'' notice allowing the new owners of the freshly minted shares to trade them within 12 months - a technicality under the law which requires the somewhat absurd creation of an entire prospectus to issue a single share to allow notional disclosure of the state of the company.
As a result, it applied to the Federal Court for relief from prosecution or any other form of action for what it said was an inadvertent oversight. That approval has now come through, making the sales all hunky dory.
Most of the first lot of options went to Macquarie Group. With Silver Lake's shares now sitting above $3.70 and the court approval through, Macquarie is free to deal in stock that has a paper profit above $3 million.
Insider can only pass on kudos to the Silver Lake team for (a) their disclosure and (b) the fact that the company has one baby goldmine and another on the way.
Whether the options arrangement was to the broader benefit of other investors is questionable - not that anyone is complaining much, given how well the shares have done. Still, there is always the chance that existing investors could have been better off had those same keen buyers had to chase stock through the market - which normally results in pushing the price up.
Insider had thought originally that maybe the options deal was designed to both add some institutional weight to the share register at Silver Lake, and give the management team some spare cash to exercise the balance of their options when they fell due.
It would seem not the latter reason, because they sold the balance of their options in December, this time at $3.10 each.
At any rate, the scribbles on the back of Insider's envelope suggest they have crystallised some $70 million from flogging the options, with the listed company raising about $7 million for its coffers along the way.
Not that Silver Lake desperately needed the money, given that it has nice cash flow - it had nearly $100 million in cash and bullion at December 31, and reckoned that it had earned almost $25 million in pre-tax profit for the half year.
Silver Lake also recently launched one of 2012's first takeovers, deciding to swallow another WA minnow, Philips River, in a $20 million agreed merger that boosts the former's ground in the Murchison region and will see the acquired assets bundled up as the Great Southern Gold Project.
Anyone for a takeover?
TAKEOVERS Panel chief Allan Bulman will no doubt be hoping that Silver Lake's deal is a sign of things to come - or he may have to take up a second job.
He told Insider the other day that the panel, which chiefly arbitrates on takeover disputes, is having close to its quietest time ever.
The last application to the panel was just before Christmas, a complaint by Hastings Diversified Utilities Fund that APA Group had told porkies in its bid documents.
The sitting panel, headed by corporate law specialist Ian Ramsay, found there was some substance to HDF's complaints but settled for a supplementary bidders' statement over making a declaration of unacceptable circumstances.
Prior to the HDF matter, though, no one had knocked on the door since the beginning of September, when SABMiller contested some of Foster's Group's figures during their brief battle.
Not that Bulman and team have been sitting around with their feet on the desk downloading free apps to fill the time, but it is yet another indicator (apart from empty desks in investment banks) of how little is happening while financial markets hold their breath for some certainty on Europe's financial problems.
Jury out on S&G sale
LEARNED friends at listed lawhouse Slater & Gordon were unable to shed any light last night on the unusually high turnover in its shares.
Almost 6 million of them changed hands, including a single line of 3 million and another of almost 900,000, the most in a single day since the company was handed up to the ASX bench in 2007.
Insider understands that there is no evidence that the shares came from the extensive, and interlocked, employee holdings where under pre-float agreements, any disposal of more than 100,000 shares has to be notified to the board.
Managing director Andrew Grech was still haunting Chancery Lane in London's legal district last night, fresh from striking an $80 million deal to acquire Russell Jones & Walker, so could not be reached.
The jury is out on why the stock was done at $1.68 a share - a discount to the market price of $1.70.
insider@fairfaxmedia.com.au
