Yamana Gold Merger Could Face Rival Bidders

A successful three-way merger of Yamana Gold Inc. (AUY), Meridian Gold Inc. (MDG) and Northern Orion Resources (NTO) should establish Yamana as a leading South American miner. But given that the plan includes a friendly merger between Yamana and Northern Orion, and a hostile offer for Meridian, the chances of a competing offer for the latter may be greater.

In fact, Meridian’s asset base appears to fit well with precious metal producers like Hochschild Mining Plc, Buenaventura Mining (BVN) and Hecla Mining (HL), RBC Dominion Securities analyst Michael Curran said in a note to clients.

He thinks there is a “moderate” chance of a competing bid emerging, but added that Xstrata Plc (XSRAF.PK) may be interested in Northern Orion’s assets.

Mr. Curran also noted that the deal would alleviate some of the concerns related to Meridian’s lack of growth. However, a merger would also alter its gold and silver asset base by including base metal exposure through copper and molybdenum.

Comments

[Bob Kirtley_:]

Rival bidders you say? Bring it on!

2007 Jun 29 09:10 AM