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Sprott Announces $898m Hostile Bid For Physically-Backed Gold & Silver Funds

By Kitco News
Tursday April 23, 2015 2:10 PM

(Kitco News) - In an attempt to better position its products, Sprott Asset Management announced an $898 million hostile bid for two competing funds backed by gold and silver.

According to the company’s latest press release, Sprott intends to acquire the Central Gold Trust (GTU) and Silver Bullion Trust (SBT), two funds similar to its own physical gold and silver funds.  The offer would entail GTU and SBT unitholders to trade their units for units into Sprott’s funds.

“Sprott today announced that it intends, together with Sprott Physical Gold Trust, to commence an offer (the "GTU Exchange Offer") to acquire all of the outstanding units of GTU and, together with Sprott Physical Silver Trust, to commence an offer (the "SBT Exchange Offer") to acquire all of the outstanding units of SBT,” the release said. 

“The aggregate value of these proposed transactions would be approximately US$898 million and the resulting Sprott Physical Trusts would be highly-liquid, best-in-class bullion vehicles managed by a firm with a globally-recognized precious metals franchise,” it added.

According to the details of the offer, the proposed exchange offer would unlock $3.33 per unit for CGT holders and $0.96 per unit for SBT holders.

“Together, the offers would unlock US$69.5 million in unitholder value,” the release said.

Sprott’s CEO, John Wilson, said in the press release that through physical trusts, the company is providing unitholders with “access to a secure, convenient and exchange-traded way to hold physical gold and silver.”

The company also announced that it is exploring the option of adding coin delivery alternatives to Sprott Physical Trusts “to make their existing physical redemption features more accessible to smaller investors.”

“Adding coin delivery to the Sprott Physical Trusts would be subject to approval by the unitholders of the applicable Sprott Physical Trust,” it added.

According to the company website, Sprott’s Physical Gold Trust has roughly 1.3 million gold ounces held under management as of March 31. Sprott’s Silver Trust holds about 49 million ounces as of the same date.

By Sarah Benali of Kitco News sbenali@kitco.com
Follow Sarah Benali @Sdbenali



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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