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Gold/Mining/Energy : Homestake Mining -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (109)	9/11/1998 5:20:00 PM
From: The Ox	Read Replies (1) \| Respond to of 415

Homestake, Prime Resources Agree to New Sale Terms San Francisco, Sept. 11 (Bloomberg) -- Homestake Mining Co. and Prime Resources Group Inc. have agreed to a revised bid for Homestake to buy the 49.4 percent of Prime it doesn't own, boosting the transaction's value to $330 million. The new agreement raises the exchange ratio in the all-stock transaction to 0.74 of a Homestake share for each Prime share, from 0.675 of a share that had been offered in May, a 9.6 percent increase. Prime shareholders, other than Homestake, will get the equivalent of 27.8 million Homestake common shares. The revised offer, at yesterday's closing price, values each Prime share at US$8.79, up from US$8.14 in the original offer. Homestake shares fell 1/8 to 11 3/4 in midafternoon trading. Prime shares rose 7/16 to 8 5/16 in the U.S. and rose C$.90 to C$12.70 in Canada. Homestake's initial offer gave investors a 12.5 percent premium over Prime's share price on May 22. However, falling gold prices pushed Homestake's share price as low as 8 7/8 by Aug. 31, making its offer worth close to Prime's share price, which fell to 5 7/8. ''They had to raise the offer,'' in order to win the approval of two-thirds of Prime's non-Homestake shareholders, said David Neuhaus, an analyst at TD Securities Inc. in New York. If approved, the acquisition gives San Francisco-based Homestake 100 percent of Prime's production, and allows Prime's shareholders to participate in a global mining company that operates in 15 countries, Homestake Chairman, President and Chief Executive Jack Thompson said in a recent interview. ''It's the type of transaction that makes sense in this market,'' Neuhaus said. There's little or no due diligence to be done, and there's efficiency that can be achieved by combining the two companies, he added. Homestake Gains Prime's Cash In addition to helping Homestake cut its mining costs, the acquisition gives Homestake direct access to Prime's cash, which was US$185.8 million on June 30, Neuhaus said. Prime shareholders, who must approve the transaction, will have a choice of receiving Homestake common shares or Homestake Canada Inc. shares that are exchangeable for Homestake common shares. The transaction also is subject to approval by Homestake shareholders and the British Columbia Supreme Court, and is expected to close by mid-December, San Francisco-based Homestake said. Prime's board agreed to recommend the transaction after a committee of independent directors found that the revised offer, was ''slightly below'' the midpoint, but well within the valuation range, determined by its financial advisers, RBC Dominion Securities Inc. During the first six months of 1998, Prime's two mines in British Columbia produced 193,900 ounces of gold and 6.3 million ounces of silver.