Goldbrook likes Jilin Jien’s offer

Goldbrook Ventures (GBK-V) is being taken out by its Chinese partner in the famed Raglan mining district.

The company announced that China-based Jilin Jien Nickel Industry has tabled an unanimously supported friendly offer of 39¢ per Goldbrook share as part of its all cash offer. That amount represents a 59% premium to Goldbrook’s closing price of 24.5¢ on January 19, 2012 a 69% premium to 20 days volume weighted average price of 22¢.

Goldbrook shares responded in kind, as they were up 45% or 11¢ to 35.5¢ in Toronto on Jan. 20 on 6.29 million shares traded.

The company says that as part of the offer Jilin Jien will also buy all the outstanding warrants, as it will pay 4¢ for warrant’s with a 35¢ strike and14¢ for warrants with a 25¢ strike price.

Back in November of 2009 Jilin Jien and Goldbrook acquired Canadian Royalties and all of its nickel-sulphide assets. The deal was structured so that Goldbrook would have a 25% stake in the assets while Jilin Jien would hold the remaining 75%.

The assets consist of nickel, copper, cobalt, platinum, palladium and gold deposits in the Raglan mining district and are collectively known as the Nunavik nickel project.

With Jilin Jien’s offer for Goldbrook being worth $100 million on a fully-diluted basis, the bid represents a solid return for Goldbrook considering the company’s portion of the $149 million takeover of Canadian Royalties amounted to roughly $37 million.

Goldbrook says that its directors and officers have roughly 16.5 million common shares and warrants in a lock-up agreement with Jilin Jien, which represents roughly 6% of the company’s equity. The offer has a termination fee of $3 million and Jilin Jien has the right to match any superior offers.

Jilin Jien currently holds roughly 3.5% of Goldbrook’s shares.