Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Item 1.01. Entry in to a Material Definitive Agreement
Arrangement Agreement
On July 11, 2011, Stillwater Mining Company ("Stillwater") announced that it has entered into an arrangement agreement (the "Arrangement Agreement") with Peregrine Metals Ltd. ("Peregrine"), where by Stillwater will acquire all of the outstanding shares of Peregrine (the "Acquisition"). Under the terms of the Arrangement Agreement, Stillwater will exchange 0.08136 shares of Stillwater common stock and US$1.35 in cash for each common share of Peregrine. Based on the closing share price of Stillwater common stock as of July 8, 2011, which was US$23.72, the Arrangement Agreement places a value on Peregrine common shares of US$3.28 (CDN$3.16) per share. This represents a total purchase price of US$487.1 million, and assumes the exercise of all outstanding Peregrine options and warrants resulting in a CDN$34.4 million (US$35.7 million) contribution to treasury, and implying a net equity value of US$451.4 million. Upon completion of the transaction, Stillwater and Peregrine shareholders will own approximately 89.5% and 10.5%, respectively, of the combined company on a fully diluted basis. The Arrangement Agreement is attached to this Current Report on Form 8-K as Exhibit 99.1.
Support Agreements
In connection with the execution of Arrangement Agreement, each of the directors and officers of Peregrine entered into a Support Agreement with Stillwater, pursuant to which each director and officer agreed, among other things, support the Acquisition and take no actions which would reduce the success of, or delay or interfere with the completion of, the Acquisition and the other transactions contemplated by the Arrangement Agreement.
Commitment Letter
On July 11, 2011, Stillwater also entered into a Commitment Letter (the "Commitment Letter") with Deutsche Bank AG Cayman Islands Branch ("DBCI") and Deutsche Bank Securities, Inc. ("DBSI") pursuant to which DBCI, on the terms and subject to the conditions set forth in the Commitment Letter, committed to extend to Stillwater a bridge facility consisting of a senior secured first lien bridge loans in an aggregate principal amount of up to $200.0 million (the "Bridge Loan"). Pursuant to the Commitment Letter, the proceeds of the Bridge Loan, if drawn upon, together with the proceeds of any senior notes, convertible notes and common stock issued on or prior to closing date and cash and hand, will be used to finance the acquisition of Peregrine and to pay all fees and expenses incurred in connection therewith. The full amount of the Bridge Facility must be drawn in a single drawing on the closing date and amounts borrowed under the Bridge Facility that are repaid or prepaid may not be reborrowed. Each direct and indirect wholly-owned domestic subsidiary of Stillwater is required to provide an unconditional guaranty of all amounts owing under the Bridge Loan on a senior basis. The Bridge Loan shall bear interest, reset monthly, at the rate of three-month LIBOR (or, if greater, 1.50%) plus 7.00% per annum, subject to increases of .50% each 90 days after funding, subject to a cap. Interest on the Bridge Loan will be payable in cash, quarterly in arrears. The Bridge Loan shall contain affirmative and negative covenants, representations and warranties and events of default that are usual and customary for facilities of this type.
