CALGARY — Sprott Inc. (TSX:SII) says it's making an all-share takeover bid worth US$3.1 billion for rival bullion holder Central Fund of Canada Ltd.
The Toronto-based money management firm has filed an application with the Court of Queen's Bench of Alberta seeking to allow shareholders of Central Fund (TSX:CEF.A) to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott's existing precious metal holding entities.
Sprott says the transaction would be similar to the takeover of Central GoldTrust in 2016 that had support from more than 96 per cent of votes cast.
The firm says Central Fund's shares are trading at a discount to net asset value, and a takeover by Sprott could unlock US$304 million in shareholder value.
Central Fund did not have any immediate comment on the unsolicited offer.
Sprott's existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.