Larvotto Resources Ltd (LRV.AU) saw its shares plummet 5.86% during intraday trading on Thursday, as the market reacted to significant corporate announcements from the company.

The sharp decline followed Larvotto's announcement of a binding agreement to acquire all shares of Hammer Metals Ltd through a scheme of arrangement. Under the terms, Hammer shareholders will receive one new Larvotto share for every 22 Hammer shares held, implying an offer price of A$0.06 per Hammer share and an equity value of approximately A$54 million for the acquisition.

Concurrently, Larvotto announced a A$15 million placement at a 15% premium to advance its Mt Isa strategy. Following the acquisition, existing Larvotto shareholders are expected to own about 92.7% of the combined entity, with Hammer shareholders holding the remaining 7.3%. The Hammer board has unanimously recommended the deal, subject to standard conditions including no superior proposal emerging.