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Yamana Gold Inc. (NYSE:AUY) won shareholder approval Wednesday for its proposed acquisition of Northern Orion Resources Inc. (NTO). But the proposed three-way merger involving Meridian Gold Inc. (MDG) is looking less likely to succeed, UBS analyst Tony Lesiak wrote in a note to clients.

He points out that deal spreads suggest Yamana will not be able to tender the 66.7% of Meridian shares necessary to complete the merger. "Arb interest has been below expectations and [Meridian] continues to vehemently oppose the bid," he wrote. However, he does not expect any competing bidders to emerge.

Mr. Lesiak also speculated that Yamana's own determination to complete the deal could be waning because of the "significant" decline in its share price, and the difficulty in combining Northern Orion's Agua Rica project with the nearby Alumbrera project, which is operated by Xstrata PLC (Northern Orion has a 12.5% minority stake). Yamana is hoping to reach a joint venture agreement with Xstrata.

Yamana's "full, fair and final offer" is due to expire Sept. 7. Yamana chief executive Peter Marrone has said he has no plans to raise the offer or extend it.

AUY vs. NTO vs. MDG 1-yr chart:

auy mdg nto chart

Source: Yamana-Northern Orion-Meridian Merger Doesn't Look Likely to UBS