Iamgold's Bid for Orezone Good News for Shareholders

Iamgold Inc.'s (IAG) friendly bid for Orezone Resources Inc. (OZN) on Thursday got good reviews from the Street on Friday.

Iamgold will pay C$139-million in shares to acquire Orezone's Essakane deposit in Burkina Faso.

RBC Capital Markets analyst Michael Curran said the deal was a good fit with Iamgold's asset base and a solid growth opportunity.

"The purchase price is higher than we would have expected in this market, but accretive to Iamgold's net asset value," he said in a research note. He added that the threat of a competing bid is low.

Wellington West analyst Catherine Gignac thinks the deal will be dilutive at least in the short term, but also believes it solves Iamgold's growth issues.

She wrote in a note to clients:

Despite the near-term dilutive impact of the acquisition, we believe Iamgold shareholders should appreciate this effective deployment of cash for a complimentary asset as it substantially improves the company's production growth profile at a relatively inexpensive cost.