Announcement • Jun 21
Red 5 Limited (ASX:RED) completed the acquisition of Silver Lake Resources Limited (ASX:SLR) in a merger of equals transaction Red 5 Limited (ASX:RED) entered into a binding Scheme Implementation Deed to acquire Silver Lake Resources Limited (ASX:SLR) in a merger of equals transaction for AUD 1.1 billion on February 5, 2024. As a part of the transaction, Red 5 shareholders will own 51.7% of the merged entity and Silver Lake shareholders will own the remaining 48.3%. The combined entity will be led by Russell Clark as Chairman and Luke Tonkin as Managing Director and CEO. The new board of directors of the combined entity will comprise four directors from each of the current Red 5 and Silver Lake boards. The deal is subject to approval from court, regulatory board, and shareholders of Silver Lake, and has been unanimously approved by board of directors of Red 5 Limited and Silver Lake Resources Limited. The deal has been approved by shareholders of Silver Lake Resources Limited, and is expected to be completed on June 19, 2024. As of June 6, 2024 Transaction has been approved by the court. Gresham Advisory Partners Limited acted as financial advisor, and Herbert Smith Freehills and Davies Ward Phillips & Vineberg LLP acted as legal advisor to Red 5 Limited. Russell Philip, Peter Jarosek, Simon Reid, Giacomo Giorgi and Rebecca Field of Corrs Chambers Westgarth acted as legal advisor, RBC Capital Markets, Australia and Euroz Hartleys Limited acted as financial advisor, and Computershare Investor Services Pty Limited acted as registrar to Silver Lake Resources Limited. Red 5 Limited (ASX:RED) completed the acquisition of Silver Lake Resources Limited (ASX:SLR) in a merger of equals transaction on June 19, 2024. Price Target Changed • Jun 13
Price target increased by 11% to AU$1.93 Up from AU$1.74, the current price target is an average from 3 analysts. New target price is 24% above last closing price of AU$1.57. The company is forecast to post earnings per share of AU$0.13 for next year compared to AU$0.033 last year. New Risk • Jun 04
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 2.7% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. This is currently the only risk that has been identified for the company. 
