EVR/EDV is down 17.1% to CAD1.99 on the TSX (fell 41 cents and had been as low as $1.92).
My first pass review of the proposal is that it does not add value for existing shareholders of EDV/EVR because they are giving up too large a share to Avion shareholders, who will own around 40% of the combined company. A much smaller premium might have been OK for the takeover, say 15-20%.
Avion operates in Mali which is now seen as a high risk country. The positive about Avion is that it has a smallish but high grade operation which can be expanded. The extra 1,700 sq kms of tenements are not needed by since EVR has plenty of areas to explore in its existing tenements of 10,000 sq kms.
I do not like it that Mark Connolly has stepped down as COO. He is a very honest guy and worked his butt off to make ADU happen, in addition to improving the operational effectiveness of the other EVR mine.
There is still upside for shareholders, but less than before.
I have sold out to have cash on hand in case there was a significant near term market downturn.
GLA.
loki
EVR Price at posting:
$1.95 Sentiment: None Disclosure: Not Held
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