Yamana Gold has increased the cash component of its offer by C$0.50 to acquire Meridian Gold, whose shareholders now stand to receive C$7.00/share in cash plus 2.235 shares of Yamana common stock. In a joint press release, the companies said their respective Boards of Directors agree to unanimously recommend Meridian shareholders accept the revised offer. Yamana extended the offer period to midnight Oct. 12. Yamana said it will fund the cash portion of the transaction using currently available debt facilities. Yamana's revised offer now represents a spot premium of 37.7% (based on closing prices on the Toronto Stock Exchange) compared to its original proposal on June 27. Financial advisors to both firms say the revised offer is fair from a financial standpoint. Goldman Sachs and BMO Capital Markets are advising Yamana, while Genuity Capital Markets, Canaccord Capital and J.P. Morgan are advising Meridian. NYSE-listed shares of Meridian were last up 6.2% to $36.40 in thin pre-market trading, after losing 0.7% to $34.27 on Friday. Yamana Gold was last up 1.1% to $12.75, also thinly trade in the pre-market; Yamana lost 0.4% to $12.61 on Friday.
Sources: Press release, MarketWatch
Commentary: Our Favorite Stocks to Watch as the Gold Bull Kicks Back into Action • Northern Orion, Yamana, Meridian: The Golden Dynasty Soap Opera • Yamana-Northern Orion-Meridian Merger Doesn't Look Likely to UBS
Stocks/ETFs to watch: AUY, MDG, NTO
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