Please see below today’s announcement by Eldorado Gold to acquire European Goldfields for $2.4bn. European Goldfields operates the Stratoni mine in Greece and is developing new projects in the country. Eldorado, which took a 19.9% stake in Glory Resources as part of the recent placement commented that the acquisition would create the "dominant gold mining business in the Aegean region".
Increased corporate activity and interest in Greece’s resources sector by Eldorado and other parties all bodes well for Glory Resources when it recommences trading on the ASX which will occur shortly.
------------------------------------------------- Eldorado Gold in $2.4bn play for European Goldfields • by: David Winning • From: Dow Jones Newswires • December 19, 2011 12:01PM ELDORADO Gold has agreed a cash and shares deal worth $C2.5 billion ($2.4bn) to buy European Goldfields, creating a gold producer with a market value around $C11bn. The deal comes as gold prices trade close to record highs on concerns about the health of several European economies as terms of credit tighten, and worries that China's manufacturing sector is showing signs of slowing. Gold is often seen as a safe-haven asset by investors when compared to traditional asset classes like equities. In a statement, Eldorado said shareholders of European Goldfields will receive 0.85 Eldorado shares and $C0.0001 in cash. That offer values European Goldfields' shares at $C13.08 each, based on Eldorado's most-recent closing share price on the Toronto Stock Exchange, and is pitched at a 56.5 per cent premium. The offer has won the backing of the board of European Goldfields, and is conditional partly on support from holders of at least two-thirds of the company's shares. BlackRock Investment Management (UK), which has a 7.3 per cent stake in European Goldfields, has agreed to vote in favour of the deal, Eldorado said. Paul Wright, president and chief executive of Eldorado, said the acquisition would create the "dominant gold mining business in the Aegean region" of Europe. Eldorado's assets include projects in Greece and Turkey, while European Goldfields operates the Stratoni mine in Greece and is developing new projects in the country and also in Romania. European Goldfields also has a partnership with Aktor, Greece's largest construction company. Eldorado, which was advised by GMP Securities, said the combined company's annual gold production would reach over 1.5 million troy ounces by 2015.
GLY Price at posting:
21.5¢ Sentiment: Buy Disclosure: Held
