The second and third largest shareholders in Aurion Gold have rejected Placer's offer as being too low. Colonial and M & G investments rejection will mean that Placer's takeover bid will fail.
Don't get sucked in by Placer's CEO Jay Taylor's comments “We urge AurionGold shareholders to carefully consider whether they want to run the risk of getting caught in a potentially less liquid and less appealing investment if they do not accept the offer.”
Yes Placer holds approx 31% of aurion however that means there are still over 300,000 shares available for trade; hardly what I call illiquid!
This offer should not be accepted as it does not represent full value for AOR shareholders.
A 7c FF dividend, possibility of a special dividend and future exploration prospects makes it appealing to hold AOR for the mid-long term which is what I will be doing.
Colonial rejects Placer offer
August 16, 2002
It was reported today that AurionGold’s (AOR) second- and third-biggest shareholders, Colonial First State and M&G Investment Management, have rejected a takeover offer for the gold company by Placer Dome because it's too low.
“Rejection by Colonial, the nation's top fund manager, and M&G may discourage other shareholders from accepting Placer's $799 million cash and stock offer, analysts said,” Bloomberg said.
Colonial's 16% stake would have given Placer about 46% of AurionGold. Placer held a 27% stake until this morning, in which it has announced its stake has lifted to 28.89%.
“We will definitely reject it,” said Graham French, who manages the M&G fund that holds AurionGold shares.
“The bid doesn't reflect the potential in Aurion. It has good assets and management and a good future as an independent company.”
“We see AurionGold as a quality gold company with strong prospects,'' said Ian Harding, head of Australian equities at Colonial.
“There are limited choices for gold exposure within Australia.”
Placer offered 17.5 of its shares for every 100 AurionGold shares and 35c a share in cash.
Placer, in face of stiff opposition by AurionGold directors and calls for a sweetener, added a 35c per share all cash component to its bid. It also declared this unconditional and fina.
However, AurionGold has continued to advise shareholders to reject the sweetened offer.
“In the view of your directors, Placer Dome is offering an unacceptable price for your company having regard to the quality of AurionGold's assets and its future prospects,” it has said recently.
Placer’s bid is due to expire at 6 pm tonight. It has already extended the offer three times.
AOR
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