Why Dundee Precious Metals Is Paying $1.25B for Adriatic Metals Now
Dundee Precious Metals has agreed to acquire Adriatic Metals in a recommended £924 million share and cash offer, valuing Adriatic at approximately US$1.25 billion and delivering a premium of over 47% to recent trading prices.
- Recommended acquisition via UK scheme of arrangement
- Offer values Adriatic at US$1.251 billion with 50.5% premium to LSE price
- Adriatic shareholders receive 0.1590 Dundee shares plus 93 pence cash per share
- Transaction expected to complete in Q4 2025, subject to approvals
- Post-completion, Adriatic becomes Dundee subsidiary with management changes
Deal Overview
Adriatic Metals Plc has agreed to be acquired by Dundee Precious Metals Inc. (DPM) in a recommended transaction valued at approximately US$1.251 billion. The deal will be executed through a UK scheme of arrangement, offering Adriatic shareholders a combination of cash and new Dundee shares. Specifically, for each Adriatic share, shareholders will receive 0.1590 new Dundee shares plus 93 pence in cash, representing a significant premium of over 47% to recent trading prices on both the London and Australian exchanges.
Strategic Rationale and Synergies
Dundee Precious Metals views the acquisition as a compelling strategic fit, enhancing its portfolio with Adriatic’s flagship Vareš Silver Operation in Bosnia and Herzegovina. Vareš is a low-cost, underground precious metals mine with a long mine life and promising exploration potential, notably at the Rupice Mine. Dundee’s extensive experience operating in the Balkans, combined with its strong financial position, is expected to accelerate Vareš’s ramp-up and unlock further value through operational synergies and exploration upside.
The combined group will benefit from an enhanced operating and financial profile, with Dundee shareholders owning approximately 75.3% of the enlarged entity and former Adriatic shareholders holding about 24.7%. The transaction is expected to be accretive on a cash flow per share basis in the first year post-completion, delivering attractive returns and improved capital allocation capabilities.
Transaction Details and Approvals
The transaction values each Adriatic share at 268 pence, based on exchange rates and Dundee’s share price as of 11 June 2025. The offer includes a Mix and Match Facility allowing shareholders to elect their preferred split between cash and shares, subject to offsetting elections by others. The total cash consideration is £321 million, with 54.9 million new Dundee shares to be issued.
Completion is expected in the fourth quarter of 2025, subject to customary regulatory and shareholder approvals, including clearance from the Bosnian Competition Council and approvals from both companies’ shareholders. The deal is supported by irrevocable undertakings from Adriatic’s directors and major shareholders representing over 37% of its issued capital, as well as Dundee’s board and executive officers.
Post-Completion Outlook and Management Changes
Following completion, Adriatic will become a wholly owned subsidiary of Dundee. Adriatic’s CEO Laura Tyler and CFO Michael Horner will step down, and the UK head office is expected to close, resulting in a limited workforce reduction. Dundee plans to integrate Adriatic’s experienced mining personnel and leverage its management expertise to optimize operations and pursue growth opportunities across the combined portfolio.
The combined group will maintain a strong capital markets profile with increased scale, liquidity, and financial flexibility. Dundee intends to continue its dividend policy and capital allocation strategy, aiming to generate sustainable shareholder returns while funding growth initiatives.
Community and Regional Impact
Both companies emphasize their commitment to responsible mining and positive community engagement. Dundee plans to build on Adriatic’s existing relationships with local governments and communities in the Balkans, ensuring sustainable benefits and alignment with ESG principles.
Bottom Line?
As Dundee Precious Metals moves to finalize this transformative acquisition, investors will be watching closely for regulatory approvals and integration progress that could reshape the regional mining landscape.
Questions in the middle?
- How will Dundee optimize the Vareš Silver Operation’s production and exploration potential?
- What are the detailed plans for workforce integration and potential reductions post-merger?
- Could the transaction trigger further consolidation in the Balkan mining sector?