Meridian Gold (MNG-T, MDG-N) has rejected Yamana Gold’s (YRI-T, AUY-N, YAU-L) revised offer for the company on the basis that it still doesn’t provide value to shareholders.
The unsolicited cash-and-stock bid was originally made in July, with Yamana upping the cash component by 85 to $4.00 per share but on Aug. 14. The stock component of the bid is unchanged at 2.235 of a Yamana common share for each Meridian share. Yamana also waived the due diligence access condition and extended the deadline to Sept. 7.
“Yamana’s amended offer still falls short,” said Meridian chairman Brian Kennedy in a statement. “Given the lack of any meaningful improvement in the offer, the board continues to believe that holding Meridian shares is preferable to accepting the inadequate Yamana offer.”
Meridian says the new offer represented “only” a 2.9% increase to the total deal as of the date of the changed bid.
The company says its financial advisors at BMO Capital Markets and Goldman, Sachs & Co. also considered the deal inadequate.
The bid remains a 3-way deal with Northern Orion Resources (nno-t, nto-x); if two-thirds of Meridian shareholders accept a bid by Yamana, Yamana will first acquire Northern Orion for $940 million. The combined company will then buy Meridian.
On Aug. 20, on Meridian’s rejection of its offer, Yamana shares rose about 2% to $10.48 apiece on a trading volume of more than 4 million shares.
Meridian shares rose about 1%, or 34, to $26.30 on a trading volume of more than 1 million.
Northern Orion shares slid less than 1% to $4.65 on a trading volume of 2.2 million shares.
On July 19, when Yamana made its formal offer for Meridian, Yamana shares closed at $13.40, and Meridian at $31.58.
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