AurionGold caves into Placer, announces div
October 14, 2002
The directors of Australia’s largest gold miner AurionGold (AOR) finally capitulated on Monday morning, recommending shareholders now accept the takeover offer from Canada’s Placer Dome. The directors also announced a 10c fully franked dividend for those shareholders who have held out.
Placer Dome late Friday again extended its offer for Sydney-based AurionGold for the ninth time. The offer is now due to close on October 25.
AurionGold has mounted a vigorous defence to the hostile takeover, recommending shareholders reject the offer as too low. Placer however has steadily increased its acceptances to 45% of the company.
In its release, AurionGold said that it had unsuccessfully pursued several initiatives to improve shareholder value including seeking alternative bids.
“The directors have considered these issues and now believe it is no longer in the best interests of AurionGold shareholders to reject the Placer Offer,” AurionGold said.
“Each of the directors of AurionGold recommends that shareholders … either accept Placer’s Offer or sell their shares on market while the Offer remains open.”
AurionGold cited influencing factors as the increased probability that Placer would reach majority control, the Capital Gains Tax relief possible if it reached 80% control, and the increased synergies available if it won full ownership.
It also followed previous advice from Placer, warning that AurionGold’s shares may fall if the Offer closed and that in the meantime the 45% shareholding would reduce liquidity and institutional interest as well as make it difficult for any other party potentially interested.
AurionGold’s decision should be a small victory for shareholders who have not accepted the offer, as the dividend will help distribute an estimated $135 million in franking credits within Aurion.
Colonial First State and UK-based M&G Investment Management are holding 12.4% and 6% of the issued capital respectively. Both had consistently argued the Placer offer was too low, however in September Colonial gradually cut its stake in the company from 15.2%.
At the close of trade on the Toronto Stock Exchange on Friday night, Placer Dome stock was 5% higher, valuing the AurionGold offer at $3.05.
At 1108 AEST AurionGold shares were 12c higher at $3.00.
AOR
apollo series 2013-1 trust
