Northern Orion Rises As Yamana/Meridian Deal Moves Forward

 |  Includes: AUY, MDG, NTO
by: FP Trading Desk

Northern Orion Resources Inc. (NTO) jumped more than 14% Friday morning, on the news that Meridian Gold Inc. (MDG) has failed to attract a friendly bidder in its attempt to fend off Yamana Gold Inc.'s (NYSE:AUY) hostile offer for it.

In a three-company takeover bid, Yamana has offered to buy Northern Orion at 0.543 of a Yamana share plus Cdn.$0.001 subject to at least 66 2/3% of Meridian Gold Inc. shares being tendered to Yamana's offer for Meridian.

Northern Orion shareholders voted in favor of the takeover on August 22, 2007, but given Meridian's rejection of the deal to date, Northern Orion shares have traded below the value of the Yamana offer.

But now that Meridian has failed to secure a white knight, it appears Northern Orion investors are gaining confidence the deal will get done.

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