Yamana's Acquisition of Meridian and Northern Orion Finalized

On Monday, Yamana (AUY), and Meridian (MDG) announced that 79,873,250 common shares of Meridian Gold had been validly deposited to Yamana, which equates to approximately 78 percent of Meridian’s common shares on a fully diluted basis.

Consequently, all of the conditions to Yamana’s agreement with Northern Orion (NTO) were met, and Yamana’s acquisition of Northern Orion was completed, and took effect on October 13, 2007. Northern Orion shareholders will receive 0.543 of a Yamana common share, and C$0.001 in cash for each Northern Orion share.

We have long been a fan of Northern Orion, having included it in our list of the Top 8 Gold Stocks, although technically, it is more of a copper play than gold. We first highlighted Northern Orion back in February of this year, when we stated that:

NTO has been on a steady decline since May of 2006, forming a descending triangle pattern. This pattern often forecasts a breakout and should be seen as bullish with clear support around $3.75. This support line has been tested three times over the past year and has held every time. Although it is still early to confirm, technical indicators are turning North for both the RSI and MACD, confirming the bullish sentiment.

Bullish indeed! NTO bounced off support at $3.75, and rocketed all the way to $7.50, thereby doubling in value. Yamana’s offer of .543 shares roughly equates to that amount, as Yamana recently closed at C$13.43 on the Toronto Stock Exchange.

Congratulations to our readers who went along for part or all of the ride! There are several other takeover targets waiting to be snatched up by the resource-hungry majors. A few that we place high on that list can be found in our article titled “Newmont Grabs Miramar - Who Is Next Gold Takeover Target?”

As always, good luck and happy investing!

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

Comments

[West Coast ...:]

What a waste of shareholder equity! As if we Yamana shareholders have not been hit hard enough by the Meridian-dilution-play - now the (reasonably good) prospects of developing Agua Rica are all the sudden off the table (Marrone's statement - the big guys Xstrata & Goldcorp seem to be less inclined to help this wanna-be to feed their mill to save moolah). The price tab for NTO just for the Alumbrera dividend? Ridiculous. There should be a review process!

2007 Oct 23 04:52 PM