Sierra Metals Reiterates Recommendation to Take No Action as Alpayana Amends Hostile Bid
Sierra Metals (TSX: SMT | OTCQX: SMTSF) has reiterated its recommendation for shareholders to reject Alpayana's amended hostile takeover bid. The revised offer increases from C$0.85 to C$1.11 per Common Share, with an extended expiry date to April 25, 2025.
Alpayana has waived its previous condition requiring 66⅔% of shares to be tendered, suggesting lower-than-expected shareholder interest. BMO Capital Markets has delivered an opinion confirming the revised offer price remains financially inadequate for shareholders.
The company strongly defends its 2025 EBITDA guidance of approximately US$130 million, representing 75% year-over-year growth. Sierra Metals disputes Alpayana's claims about potential dilutive financing, citing improved balance sheet and increased cash generation prospects. None of Sierra Metals' directors or officers intend to tender their shares to the hostile bid.
Sierra Metals (TSX: SMT | OTCQX: SMTSF) ha ribadito la sua raccomandazione agli azionisti di rifiutare l'offerta ostile modificata di Alpayana. L'offerta rivista aumenta da C$0,85 a C$1,11 per azione comune, con una data di scadenza prorogata al 25 aprile 2025.
Alpayana ha rinunciato alla sua precedente condizione che richiedeva il 66⅔% delle azioni da offrire, suggerendo un interesse degli azionisti inferiore alle aspettative. BMO Capital Markets ha fornito un parere che conferma che il prezzo dell'offerta rivista rimane finanziariamente inadeguato per gli azionisti.
La società difende fermamente la sua guida EBITDA per il 2025 di circa 130 milioni di dollari USA, che rappresenta una crescita del 75% rispetto all'anno precedente. Sierra Metals contesta le affermazioni di Alpayana riguardo a potenziali finanziamenti diluitivi, citando un bilancio migliorato e prospettive di generazione di cassa aumentate. Nessuno dei direttori o funzionari di Sierra Metals intende offrire le proprie azioni all'offerta ostile.
Sierra Metals (TSX: SMT | OTCQX: SMTSF) ha reiterado su recomendación a los accionistas para rechazar la oferta hostil modificada de Alpayana. La oferta revisada aumenta de C$0.85 a C$1.11 por acción común, con una fecha de expiración extendida hasta el 25 de abril de 2025.
Alpayana ha renunciado a su condición previa que requería el 66⅔% de las acciones para ser ofrecidas, sugiriendo un interés de los accionistas inferior al esperado. BMO Capital Markets ha emitido una opinión confirmando que el precio de la oferta revisada sigue siendo financieramente inadecuado para los accionistas.
La empresa defiende firmemente su guía de EBITDA para 2025 de aproximadamente 130 millones de dólares estadounidenses, lo que representa un crecimiento del 75% interanual. Sierra Metals disputa las afirmaciones de Alpayana sobre posibles financiamientos dilutivos, citando un balance mejorado y perspectivas de generación de efectivo incrementadas. Ninguno de los directores u oficiales de Sierra Metals tiene la intención de ofrecer sus acciones a la oferta hostil.
시 에라 메탈스 (TSX: SMT | OTCQX: SMTSF)는 주주들에게 알파야나의 수정된 적대적 인수 제안을 거부할 것을 재차 권고했습니다. 수정된 제안은 보통주당 C$0.85에서 C$1.11로 증가하며, 만료일은 2025년 4월 25일로 연장되었습니다.
알파야나는 66⅔%의 주식이 제출되어야 한다는 이전 조건을 포기했으며, 이는 예상보다 낮은 주주 관심을 시사합니다. BMO 캐피탈 마켓츠는 수정된 제안 가격이 여전히 주주에게 재정적으로 불충분하다는 의견을 전달했습니다.
회사는 약 1억 3천만 달러의 2025년 EBITDA 가이드를 강력히 방어하며, 이는 전년 대비 75% 성장에 해당합니다. 시 에라 메탈스는 알파야나의 잠재적 희석 금융에 대한 주장을 반박하며, 개선된 재무 상태와 증가된 현금 생성 전망을 인용합니다. 시 에라 메탈스의 이사나 임원은 누구도 적대적 인수 제안에 자신의 주식을 제출할 의사가 없습니다.
Sierra Metals (TSX: SMT | OTCQX: SMTSF) a réitéré sa recommandation aux actionnaires de rejeter l'offre d'achat hostile modifiée d'Alpayana. L'offre révisée passe de 0,85 C$ à 1,11 C$ par action ordinaire, avec une date d'expiration prolongée jusqu'au 25 avril 2025.
Alpayana a renoncé à sa condition précédente exigeant que 66⅔ % des actions soient soumises, ce qui suggère un intérêt des actionnaires inférieur aux attentes. BMO Capital Markets a émis un avis confirmant que le prix de l'offre révisée reste financièrement inadéquat pour les actionnaires.
L'entreprise défend fermement ses prévisions d'EBITDA pour 2025 d'environ 130 millions de dollars américains, représentant une croissance de 75 % d'une année sur l'autre. Sierra Metals conteste les affirmations d'Alpayana concernant un financement dilutif potentiel, citant un bilan amélioré et des perspectives de génération de liquidités accrues. Aucun des directeurs ou dirigeants de Sierra Metals n'a l'intention de soumettre ses actions à l'offre hostile.
Sierra Metals (TSX: SMT | OTCQX: SMTSF) hat seine Empfehlung an die Aktionäre bekräftigt, das überarbeitete feindliche Übernahmeangebot von Alpayana abzulehnen. Das überarbeitete Angebot steigt von C$0,85 auf C$1,11 pro Stammaktie, mit einem verlängerten Ablaufdatum bis zum 25. April 2025.
Alpayana hat auf seine frühere Bedingung verzichtet, dass 66⅔% der Aktien angeboten werden müssen, was auf ein geringeres als erwartetes Interesse der Aktionäre hindeutet. BMO Capital Markets hat eine Stellungnahme abgegeben, die bestätigt, dass der überarbeitete Angebotspreis finanziell unzureichend für die Aktionäre bleibt.
Das Unternehmen verteidigt entschieden seine EBITDA-Prognose für 2025 von etwa 130 Millionen US-Dollar, was einem Wachstum von 75% im Jahresvergleich entspricht. Sierra Metals bestreitet die Behauptungen von Alpayana über potenzielle verwässernde Finanzierungen und verweist auf eine verbesserte Bilanz und erhöhte Cash-Generierungsaussichten. Keiner der Direktoren oder Führungskräfte von Sierra Metals beabsichtigt, seine Aktien dem feindlichen Angebot anzubieten.
- Projected EBITDA growth of 75% year-over-year to US$130 million in 2025
- Net debt to 2025E EBITDA ratio below industry median
- Successfully met 2024 guidance and major objectives over past two years
- Ongoing hostile takeover attempt creating uncertainty
- Company facing claims about potential need for dilutive financing
- Recent adjustments to preliminary financial results during 2024 audit process
- None of the directors or officers of Sierra Metals have, or intend to, tender their Common Shares to the Hostile Bid
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Amended Hostile Bid indicates lack of success in persuading shareholders to tender their Common Shares to the initial offer price of
C per Common Share$0.85 - Amended Hostile Bid continues to undervalue Sierra Metals
- Board of Directors continues to recommend that shareholders REJECT the opportunistic hostile take-over offer and TAKE NO ACTION
The notice of variation and extension dated April 2, 2025 and filed by Alpayana on April 4, 2025 increases the offer price from
Sierra’s financial advisor, BMO Capital Markets has also delivered an opinion (the “Inadequacy Opinion”) to the Board and the Special Committee of independent directors (the “Special Committee”), which reaffirms that, as of the date of the opinion, and based upon and subject to the assumptions, limitations and qualifications contained therein and such other matters as BMO Capital Markets considered relevant, the Revised Offer Price is inadequate from a financial point of view to the shareholders of Sierra Metals.
Miguel Aramburu, Chair of the Board, commented:
“Alpayana continues to offer an inadequate price that undervalues Sierra Metals and does not reflect full and fair value for the Common Shares of the Company. The Board believes there is far greater value inherent in the Company’s assets, particularly in light of our strong financial and operating performance. We recommend that shareholders reject the Hostile Bid as it is not in the best interests of Sierra Metals or our shareholders.”
Response to Alpayana’s most recent claims
Alpayana’s news release issued on April 2, 2025 repeated several of the unsubstantiated claims it first put forward in its take-over bid circular dated December 30, 2024 (the “Take-Over Bid Circular”). The Company fully addressed these claims in the Directors’ Circular. In addition, Alpayana has made new assertions relating to the Company, including the following:
-
Alpayana calls into question the reliability of the Company’s 2025 guidance, based on adjustments made to preliminary financial results during the 2024 year-end audit process. The Company reaffirms its guidance that 2025 EBITDA1 is expected to be approximately
US 2, representing year-over-year growth of$130 million 75% . Furthermore, the Company reminds its shareholders that the management team has successfully executed on all of its major objectives over the past two years, delivering significantly improved results and also met its guidance for 2024. The adjustments reflected in the Company’s 2024 audited financial statements are the result of a rigorous internal review initiated by the Company’s new financial leadership team. Attempts to cast doubt on the Company’s outlook based on responsible and transparent financial corrections are misleading and fail to recognize the significant operational and financial turnaround delivered by the Company over the past two years. - Alpayana speculates that the Company may undertake a dilutive financing to service its debt. This statement disregards the significant improvement in the Company’s balance sheet and the outlook for increased cash generation as demonstrated by the above-noted 2025 EBITDA guidance. As noted in the Directors’ Circular, the Company’s anticipated net debt / 2025E EBITDA ratio1 is already below the industry median. Sierra Metals has not announced or initiated any new equity financing and any speculation about dilution is unwarranted and ignores the Company’s current trajectory and financial discipline.
- Alpayana notes that the Company has not announced any alternative offers. The Special Committee continues to evaluate a range of strategic options, working closely and actively with its external financial and legal advisors. As previously announced, the Company has engaged BMO Capital Markets as financial advisor and is currently undertaking a robust process to evaluate strategic options to maximize long-term value for all shareholders and stakeholders. The Special Committee plans to report to the Company’s shareholders on its recommendations following the completion of this process.
- Alpayana alleges that the Company is “entering into a hostile macro-economic and local and international political environment,” a situation not referenced in its earlier materials. As previously noted, the Hostile Bid is opportunistic and seeks to amplify market dissonance in order to spook our shareholders into accepting an offer price that undervalues Sierra Metals and does not reflect full and fair value for the Common Shares of Sierra Metals.
The Directors’ Circular listed 12 reasons to reject the Hostile Bid, supported by details on the Company’s operations, strategy and financial position, as well as the higher valuations seen in precedent transactions, while also refuting many of Alpayana’s claims. In its news release Alpayana has offered no substantive response that might help the Company’s shareholders make a decision.
Recommendation to continue to REJECT the Hostile Bid
The Board unanimously recommends that Sierra Metals shareholders REJECT the Hostile Bid and not tender their Common Shares to the Hostile Bid. Shareholders simply need to take no action in order to REJECT the Hostile Bid.
The Board's determination was reached following careful consideration of a number of factors, including advice from its financial and legal advisors, and the recommendation of the Special Committee, including the Inadequacy Opinion from BMO Capital Markets reaffirming the inadequacy of the Revised Offer Price from a financial point of view. Furthermore, none of the directors or officers of Sierra Metals have, or intend to, tender their Common Shares to the Hostile Bid.
Shareholders are encouraged to carefully review the Directors’ Circular in its entirety. This document has been mailed to Sierra Metals shareholders and is available on SEDAR+ (www.sedarplus.ca) under the Company’s profile, and on the Company’s website (www.SierraMetals.com).
Any Sierra Metals shareholders who have already tendered their Common Shares to the Hostile Bid and who wish to obtain assistance in withdrawing them are urged to contact their broker or Carson Proxy Advisors, Sierra Metal’s Information Agent and strategic shareholder advisor, by North American toll-free phone at 1-800-530-5189, local and text: 416-751-2066 or by email at info@carsonproxy.com.
NOTES:
- This is a non-IFRS measure. See "Non-IFRS Financial Measures".
- These estimated results represent forward-looking information. See "Financial Outlook" and “Forward-Looking Statements".
About Sierra Metals
Sierra Metals is a Canadian mining company focused on copper production with additional base and precious metals by-product credits at its Yauricocha Mine in
Non-IFRS Performance Measures
Certain financial measures and ratios within this news release including "EBITDA" and "net debt to EBITDA" are not measures or ratios recognized by International Financial Reporting Standards, as issued by the International Accounting Standards Board ("IFRS"). The non-IFRS measures and ratios presented do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be directly comparable to similar measures or ratios presented by other issuers. EBITDA is a non-IFRS measure that represents an indication of the Company’s continuing capacity to generate earnings from operations before taking into account management’s financing decisions and costs of consuming capital assets, which vary according to their vintage, technological currency, and management’s estimate of their useful life. EBITDA comprises revenue less operating expenses before interest expense (income), property, plant and equipment amortization and depletion, and income taxes. Net debt to EBITDA is calculated as total debt minus cash and cash equivalents divided by EBITDA and indicates a company’s leverage and its capacity to service debt using operational cash flow. Investors are cautioned that non-IFRS financial measures and ratios should not be construed as alternatives to other measures of financial performance calculated in accordance with IFRS. The foregoing non-IFRS financial measures and ratios are provided to assist investors with their evaluation of Sierra Metals. The Company considers these non-IFRS financial measures to be important indicators in assessing its performance. See the "Non-IFRS Performance Measures" section in Sierra Metal's management's discussion and analysis for the year ended December 31, 2024 and the section “Non-IFRS Financial Measures” in the Directors’ Circular for further information on the definition, calculation and reconciliation of certain non-IFRS financial measures.
Financial Outlook
This news release contains financial outlooks about Sierra Metal's prospective results of operations including, without limitation, anticipated EBITDA for the 12 months ended December 31, 2025 which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth under "Forward-Looking Statements". Readers are cautioned that the assumptions used in the preparation of such financial outlooks, although considered reasonable by management at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on financial outlooks. Sierra Metals' actual results, performance or achievements could differ materially from those expressed in, or implied by, these financial outlooks. Sierra Metals has included the financial outlooks in order to provide readers with a more complete perspective on the Company’s future operations and such information may not be appropriate for other purposes. Sierra Metals disclaims any intention or obligation to update or revise any financial outlooks, whether as a result of new information, future events or otherwise, except as required by law.
Forward-Looking Statements
This news release contains forward-looking information within the meaning of Canadian securities legislation. Forward-looking information relates to future events or the anticipated performance of Sierra Metals and reflect management's expectations or beliefs regarding such future events and anticipated performance based on an assumed set of economic conditions and courses of action. In certain cases, statements that contain forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur" or "be achieved" or the negative of these words or comparable terminology. By its very nature forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual performance of Sierra Metals to be materially different from any anticipated performance expressed or implied by such forward-looking information. Forward-looking statements in this news release include, but are not limited to, management’s expectations regarding future EBITDA, the ability to complete potential strategic alternatives to maximize shareholder value and the timing thereof and statements regarding Alpayana and the Hostile Bid.
Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading "Risk Factors" in the Company’s annual information form dated March 26, 2025 for its fiscal year ended December 31, 2024 and other risks identified in the Company’s filings with Canadian securities regulators, which are available at www.sedarplus.ca.
The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management's beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.
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For further information regarding Sierra Metals, please visit www.SierraMetals.com or contact:
Investor Relations
Sierra Metals Inc.
+1 (866) 721-7437
info@sierrametals.com
Media Relations
John Vincic
Principal
Oakstrom Advisors
+1 (647) 402-6375
john@oakstrom.com
Source: Sierra Metals Inc.
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