Placer extends unsweetened AurionGold offer

With AurionGold‘s board of directors sticking to its guns for a cash sweetener, Placer Dome (PDG-T) has decided to extend its offer for the Aussie miner’s shares by twelve days to July 24.

However, the Canadian miner is staying with its original offer and notes that no competing offer has materialized. Placer says the extension will give AurionGold additional time to “fully advise” its shareholders.

Placer’s CEO Jay Taylor said, “We continue to believe that our offer represents significant value for AurionGold shareholders.”

On May 27, Placer unveiled an offer of 17.5 of its shares for every 100 AurionGold shares. At the time, the offer valued AurionGold’s scrip at A$4.51 apiece, for an offer of about A$2 billion. Since then, Placer’s share price has fallen sharply. Prior to the offer, Placer shares were fetching around $22 on the Toronto Stock Exchange; the issue closed at $16.40 on July 3. Over the same period, AurionGold shares have gone from A$3.48 to A$3.74, topping out at A$5 during the day on May 29.

As a result about A$500 million has been wiped off Placer’s bid.

AurionGold’s management has advised shareholders not to accept Placer’s offer, at least not in its present form, and has shown no sign of bending.

In an open letter to Taylor issued on July 2, AurionGold’s CEO Terry Burgess calls for a “material improvement” to Placer’s bid in order to compensate his shareholders for the reduction of the offer’s value and dilution of ownership of AurionGold’s assets.