Interesting reading:
Monday January 18, 3:58 pm Eastern Time
Barrick sweetens takeover bid for Argentina Gold
By Paul Simao
TORONTO, Jan 18 (Reuters) - Canadian miner Barrick Gold Corp. (Toronto:ABX.TO -
news) on Monday sweetened its hostile takeover bid for Argentina Gold Corp.
(Vancouver:ARP.V - news) in an effort to gain control of the prized Veladero gold mine in northwestern Argentina.
Toronto-based Barrick, the second largest gold producer in North America, said it was offering C$5.00 a share, or about
C$160 million, for the approximately 32 million Argentina Gold it does not already control.
Barrick owns 9.9 percent of Argentina Gold and 40 percent of the Veladero property. Barrick's new offer, which represents a
25-percent premium over the C$4.00 a share originally offered last month, expires on January 29.
The original offer was due to expire on Tuesday.
''After having some discussions with (Argentina Gold) shareholders we were confident that at this level they would tender to
our bid,'' Barrick spokesman Vincent Borg said.
''(They told us to) see if we could do better,'' said Borg, who added that Barrick's offer was ''full and final.''
Barrick and Argentina Gold, one of the hottest mining stocks on the small but lively Vancouver Stock Exchange, have fought a
bitter war of nerves since the surprise takeover bid was announced six weeks ago.
Argentina Gold spurned Barrick's first proposal, describing it as ''inadequate, opportunistic and coercive,'' but the
Vancouver-based company said it would review the revised offer and make a recommendation to its shareholders by Friday.
''We're happy to see it head in the right direction, but we would like to see it continue,'' said Argentina Gold spokeswoman
Sophia Shane.
Argentina Gold appeared to up the ante last week after it reported drill results from Veladero hinting at a sizably larger gold
reserve and then implemented a shareholders rights plan, or ''poison pill.''
Argentina Gold had previously estimated the mine contained about 4.5 million ounces of gold and 119 million ounces of silver,
but it said on Friday the property could hold 20 million ounces of gold and an undisclosed amount of silver.
Barrick, which operates the Pascua gold property six kilometres (3.8 miles) from Veladero, would dearly love to fold the mine
into its growing operations in the remote Andean mountain range on the Chilean-Argentine border.
Despite Barrick's insistence the C$5.00-a-share offer would ultimately be successful, analysts contended the final chapter in the
takeover battle had yet to be written.
''It was widely expected that they would come back for another round. While they say it is final, nothing is final in the takeover
business,'' said John Ing, president of Maison Placements Canada Inc. in Toronto.
''I suspect that the management of Argentina Gold will not be dissuaded by this offer,'' Ing added.
Analysts had speculated that Denver-based Newmont Mining Corp. (NYSE:NEM - news), which already owns 2.5 million
Argentina Gold shares and has extensive land holdings near Veladero, might swagger up to the table with a better offer.
Argentina Gold vowed last week to solicit offers from rival mining companies and to continue its drilling program.
Argentina Gold shares gained C$0.25 to C$5.15 in late afternoon trading on the VSE, while Barrick shares fell C$0.10 to
C$30.40 on the Toronto Stock Exchange. |
