DRR – Deterra Royalties | Aussie Stock Forums

Dividend Policy Adjustment – Payout Ratio1

Deterra Royalties Limited (ASX: DRR) (Deterra or Company) announces an adjustment to its dividend policy within its existing capital management strategy balancing shareholder returns and capital growth.

Deterra currently plans to maintain a dividend payout ratio of 100% of Net Profit After Tax (NPAT)for the FY24 final dividend.

For subsequent periods, the Deterra Board is targeting a minimum dividend payout ratio of 50% of NPAT, subject to balance sheet management and anticipated investment requirements, franked to the extent possible.In addition, Deterra confirms it intends to adopt a Dividend Reinvestment Plan (DRP) at or before the declaration of the FY24 final dividend, to allow investors to automatically reinvest dividends to purchase additional shares. Further details of the DRP will be released in due course.

Deterra’s Managing Director, Julian Andrews, said, “We have a strong history of disciplined capital management, having delivered more than A$480 million of fully franked dividends to shareholders since our listing in late 2020.

While consistent with our well established and overarching capital management strategy, today’s adjustment to our dividend policy is designed to better align it with Deterra’s targeted longer-term balance between capital growth and income returns.

Importantly,our discipline to return capital when not required for investment or balance sheet management remains unchanged.

Our DRP will provide shareholders with the flexibility to automatically reinvest dividends without the need to incur brokerage.

”This document was approved and authorised for release by Deterra’s Managing Director.

i hold DRR ( partially courtesy of the ILU demerger )

the DRP implementation is too late in my investment adventure for me

lets see if this smacks the share price

Recommended Cash offer to acquire Trident Royalties Plc

Highlights

 Deterra Royalties Limited (Deterra) announce an all-cash offer to acquire the entire issued and to be issued share capital of Trident Royalties plc (Trident) for 49p per Trident share,for total cash consideration of approximately £144 million (A$276 million1) (Transaction)
 Trident is a diversified mining royalty company based in the UK and listed on the AIM Market of the London Stock Exchange, with a portfolio of 21 royalties and royalty-like offtake contracts providing exposure to base, precious, bulk and battery metals, including lithium, gold, silver, copper, zinc, mineral sands and iron ore
 The Transaction will be implemented by way of a UK scheme of arrangement (Scheme)and is subject to Trident shareholder and Court approvals and other conditions precedent that are customary for a UK scheme2
 The Board of Trident intends to unanimously recommend that all Trident shareholders vote in favour of the Scheme (defined below) and each Trident Director has given an irrevocable undertaking to vote in favour of the Scheme in respect of their interests
 In aggregate, Deterra has received irrevocable undertakings and a letter of intent to vote in favour of the Scheme from the holders of approximately 84.1 million Trident shares intotal representing approximately 28.7 per cent of Trident’s issued share capital
 The Scheme is targeted for implementation in H2 2024

Transaction Details3

Deterra, via its wholly-owned subsidiary, Deterra Global Holdings Pty Ltd (DGH), has reached agreement with the Board of Trident to put an all-cash offer to the shareholders of Trident by wayof a Scheme, for total cash consideration of approximately £144 million (A$276 million).1
Based on spot AUD/GBP exchange rate of 0.521202 as at 12 June 2024.2
Deterra reserves the right, with the consent of the UK Takeover Panel, to implement the Transaction by way of a Takeover Offer for the entire issued and to be issued share capital of Trident as an alternative to the Scheme.
See section 12 of the Rule2.7 UK Takeover Code announcement3
Further details of the Transaction including full details of the required shareholder approvals, other conditions and relevant terms are provided in section 12 of the Rule 2.7 UK Takeover Code announcement released by Trident on 13 June 2024

Australian Securities Exchange NoticeThe consideration payable for each Trident share is 49 pence cash.

This represents a premium of approximately:
 22.5 per cent. to the Closing Price per Trident Share of 40.0 pence on 12 June 2024 (being the latest practicable date prior to this Announcement (Latest Practicable Date));
 42.0 per cent. to the Closing Price per Trident Share of 34.5 pence on 23 April 2024 (being the date prior to the submission of Deterra’s first non-binding, conditional proposal of 44pence per share on 24 April 2024);
 21.2 per cent. to the volume weighted average price per Trident Share of 40.4 pence for the 1-month period ended on the Latest Practicable Date;
 31.9 per cent. to the volume weighted average price per Trident Share of 37.1 pence for the 3-month period ended on the Latest Practicable Date; and
 34.7 per cent. to the volume weighted average price per Trident Share of 36.4 pence for the 6-month period ended on the Latest Practicable Date.
The Transaction is subject to Trident shareholder and Court approvals and other conditions precedent that are customary for a UK scheme.
The Trident Directors intend to unanimously recommend that Trident shareholders vote in favour of the Scheme and have agreed to vote their Trident shares in favour of the Scheme.
Deterra has received irrevocable undertakings and a letter of intent to vote in favour of the Scheme from key shareholders representing approximately 28.7 per cent. of Trident’s issued share capital.
The Trident Directors, who have been so advised by BMO Capital Markets Limited (BMO), as to the financial terms of the Transaction, consider the terms of the Transaction to be fair and reasonable.
In providing its advice to the Trident Directors, BMO has taken into account the commercial assessments of the Trident Directors.

About Trident4
Trident is a growth-focused diversified mining royalty and streaming company, with a diversified and highly cash generative portfolio of royalties and offtakes.
Trident’s current portfolio provides investors with exposure to base, precious, bulk and battery metals, including lithium, gold, silver,copper, zinc, mineral sands and iron ore.
Trident made five acquisitions during 2023, and generated US$11 million in royalty and offtake revenues in FY2023.
Trident is admitted to trading on the AIM Market of the London Stock Exchange (AIM:TRR) and on the Open Market of the Frankfurt Stock Exchange (FSE:5KV). Trident’s Shares also trade on the OTCQB in the United States (OTCQB:TDTRF). Trident’s registered office is located in London, UK.

For more information on Trident and its current business activities refer tohttps://tridentroyalties.com

Transaction rationale

Managing Director Julian Andrews said Deterra was pleased to announce the offer and looks forward to completing the Transaction as quickly as possible.“I believe our offer provides an attractive outcome for shareholders of both Deterra and Trident.It is a positive step in the execution of Deterra’s growth strategy by adding quality assets to our current portfolio.
For Trident shareholders it offers the certainty of a cash return at a significant premium and access to liquidity not available in recent trading.
We welcome the support of both the Trident Board and key shareholders representing 28.7 per cent. of Trident’s issued capital for the Transaction.”
“This Transaction is aligned with our growth strategy of building a diversified portfolio of royalties,with, amongst other benefits, leverage to our scalable operating cost structure. It is an opportunity to accelerate the growth of our portfolio through the addition of a high-quality portfolio of 21 royalties and royalty-like instruments, the majority of which are over North American domiciled assets, at an attractive time in the commodities cycle.
This portfolio is consistent with our stated investment criteria, providing exposure to commodities within our target of bulk, base and battery metalsp99 from mining operations and projects located in primarily stable and established mining jurisdictions.”
“In particular, the Trident portfolio offers significant exposure to battery metals, including a high quality ‘marquee’ asset in the form of its royalty over Lithium Americas Corporation’s Thacker Pass operation. This is a large-scale, long-life, development-stage lithium project which is currently finalising corporate funding requirements which, alongside DoE project financing, will ensure Thacker Pass is fully funded.
Trident’s remaining assets would provide both immediate cash flows to Deterra and a range of growth options.”

Transaction Funding

In order to meet the requirements of Rules 2.7(d) and 24.8 of the UK Takeover Code and permitits UK financial advisor, J.P. Morgan Cazenove, to make the appropriate confirmation of certainty of funds, Deterra and its wholly-owned subsidiary DGH have entered into a bridge facility agreement with J.P. Morgan Chase Bank, N.A, pursuant to which a £150 million loan facility is being made available to DGH. Prior to completion of the acquisition the commitments under the Bridge Facility Agreement may be reduced or replaced by other debt facilities expected to be available to DGH.

We note Deterra’s existing $500 million of bilateral facilities remain undrawn as at the date of this announcement.

Timetable

Deterra looks forward to continued engagement with Trident in preparing the necessary scheme documentation for consideration by Trident shareholders; this documentation is intended to be published within 28 days of the date of this announcement and will include full details of the Transaction.Trident shareholders will be given the opportunity to vote on the Scheme at a shareholder meeting expected to be convened in the UK summer of 2024 with the joint aim of completing the transaction in H2 2024.

This announcement was approved for release by the Board of Deterra.

i hold DRR ( partially courtesy of the ILU demerger )

at a price of 49p ( roughly $A1 a share ) i bet the royalty incomes are less than impressive currently

i wonder how many current DRR shareholders will accept future growth at the risk of lower income