Sierra Metals Reminds Shareholders of Impending Deadline to Tender Shares to Alpayana Offer

Alpayana S.A.C. has extended its all-cash offer of $1.15 per share for Sierra Metals to May 23, 2025, and has secured approximately 86.7% of the outstanding shares. Sierra Metals cautions remaining shareholders that Alpayana has refused to commit to a second-step transaction to acquire 100% of the company at the offer price, and minority shareholders may face reduced liquidity and potential conflicts of interest if they do not tender their shares.

Analysis

Alpayana S.A.C. has significantly advanced its acquisition of Sierra Metals Inc. (TSX: SMT), extending its all-cash offer of $1.15 per common share until May 23, 2025. Following the initial expiry, Alpayana secured approximately 70.7% of Sierra Metals' common shares by May 12, 2025, and subsequently increased its holdings to an aggregate of approximately 86.7% after an additional 15.9% of shares were tendered and taken up by May 19, 2025. Despite Sierra Metals' attempts to negotiate an orderly transition, Alpayana has reportedly rebuffed these efforts and, crucially, has refused to confirm it will undertake a second-step transaction to acquire 100% of Sierra Metals at the offer price, even if it surpasses the 90% ownership threshold. This creates considerable uncertainty and risk for the remaining minority shareholders, who are cautioned by Sierra Metals that they may face reduced share liquidity, potential conflicts of interest with the controlling shareholder, and no guarantee of a future offer at the current price if they do not tender by the deadline. Alpayana's substantial ownership already grants it significant control over corporate actions.

Key Decisions for Investors

• Remaining Sierra Metals shareholders should urgently evaluate tendering their shares by the May 23, 2025 deadline, considering Alpayana's acquisition of approximately 86.7% of outstanding shares and its explicit refusal to commit to a second-step transaction at the $1.15 offer price.
• Investors holding untendered shares must recognize the substantial risks associated with becoming minority shareholders in a company controlled by Alpayana, including significantly reduced trading liquidity, potential for corporate decisions not aligned with minority interests, and the absence of any assurance of a future buyout opportunity at the current terms.
• Given Alpayana's dominant position and lack of commitment to a full acquisition at the offer price, shareholders should carefully consider the strong encouragement from Sierra Metals to tender, as the prospects for realizing value for non-tendered shares post-deadline appear increasingly limited and uncertain.