Thwarted in its original offer, Glamis Gold (TSE) has boosted its bid for Eldorado (TSE) to $1.50 plus 0.47 of a Glamis share for each share of Eldorado. Based on Glamis’s trading level of $10.38, the new offer is valued at $6.38, compared with the initial offer’s value of $5.35 ($1.20 plus 0.4 of a Glamis share).
The offer is subject to the company’s receiving at least 64.9% of the fully diluted shares outstanding, down from 75%. U.S. shareholders will not be able to tender their shares until the deal is registered with the U.S. Securities Act. Provided the takeover is successful in Canada, Glamis will register the offer in the U.S. at a later date to allow American shareholders to tender their shares on the same terms.
Glamis increased the offer after shareholders holding about 10 million of the 22.9 million outstanding shares made it apparent they would not accept the first proposal.
“We are confident the substantial premium being presented in our new offer will be extremely attractive to Eldorado shareholders,” states Glamis President A. Dan Rovig. “We hope the management of Eldorado will acknowledge the increased value being offered and allow its shareholders to participate in this offer by putting aside its own interests and waiving the shareholders’ rights protection plan.”
Glamis had applied to provincial securities regulators to have the rights plan removed, but withdrew the application after it became obvious the original offer would not succeed without a price increase. If Eldorado does not waive the rights plan, Glamis plans to resubmit its request to the securities commissions.
Eldorado says the latest offer is still not a permitted bid and discriminates against shareholders who live in the U.S. Eldorado’s board and an independent committee are reviewing Glamis’ offer and expect to release a recommendation shortly.
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