>>Correct me if I'm wrong, combined companies plus additional equity issues will leave Kinross with
>>about 276 million shares >>outstanding. At a price of C$5.05 (Closed Deal Price) a share, the
>>acquisition of Amax is valued at about C$818 million (US$572>million). According to AMAX 1997
>>statements they have US$865 million in assets, US$600 million in >>debt, US$335 million of debt will be
>>retired, leaving US$265 million. Thus US$865-US$265=US$600 million >>net assets, US$572-US$335
>>= US$237 net purchase price.
>>Looks like a good deal for Kinross .
I'm afraid you've made a mistake in your analysis. As the following paragraph from a WSJ article makes clear, the $335 million in debt will be retired by the merged company. Therefore, the assets Kinross are purchasing are worth, using your numbers, $865 - $600 million = $265 million.
>>To slash $335 million of Amax's debt, Kinross will use the $135 >>million of proceeds from Cyprus Amax,
>>draw about $100 million of Kinross's cash and raise $120 million >>from an issue of rights to an underwriting syndicate led by CIBC >>Wood Gundy Securities Inc., Toronto. |
