COLDCORP'S $C3.6 billion ($3.9bn) offer for Andean Resources is likely to get over the line, according to analysts.
Australia's second-largest gold company on Friday recommended the offer after Goldcorp trumped an offer from fellow Canadian miner Eldorado Gold.
UBS today downgraded dual-listed Andean to neutral from buy and upped its target price 70 per cent to $6.79 a share on the "very low" chance of a higher bid.
"Andean have agreed that Goldcorp has the right to match any competing bid, should one be forthcoming, so we believe the probability of Eldorado coming back with a higher bid is very low," said analyst Jo Battershill.
"Goldcorp has a market capitalisation of $US32 billion versus Eldorado's $C10.5 billion, as such, we believe that Eldorado just wouldn't be able to compete with Goldcorp in a bidding war."
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Deutsche Bank also upped their target 109.2 per cent to $6.80 and kept its hold rating, signalling a higher bid is unlikely.
"There may be some potential for the bid process to become competitive but we suspect the bids are reaching the upper limit for what might be paid at this early development stage and reserve status," said analyst Brendan Fitzpatrick.
Andean is developing its 100 per cent owned Cerro Negro epithermal gold project in Argentina. It has probable reserves of 2.1 million ounces of gold, which chief executive Wayne Hubert on Friday said could "double or triple" in coming years.
Goldcorp, which is the third largest North American gold company, is offering 0.14 common shares of Goldcorp per Andean share or $C6.50 cash up to $C1bn.
Andean's Canadian shares soared 45 per cent to $C6.98 on news of the bid. Its local shares last traded at $6.40, boosting its market value to almost $3.5bn.
WHEN THE TIME COMES I WILL VOTE NO 2 GOLDCORPS PATHETIC TAKEOVER OFFER
AND Price at posting:
$6.40 Sentiment: Hold Disclosure: Held
