Placer Dome clears a late hurdle, extends bid

With about 21% of AurionGold’s shares tendered to its cash-sweetened bid late on August 6, unrequited suitor Placer Dome (PDG-T) surprised no one and extended its offer for the Aussie gold miner by nine days.

Placer’s offer, which stands at 17.5 of its own shares for every 100 AurionGold shares, was recently bolstered by a A35-per-share cash sweetener and is now set to expire at 6 p.m. (AEST) on August 16. The offer, now on its third extension, is final and unconditional.

The Vancouver-based company says that with its 21% stake, enough to make it AurionGold’s largest shareholder, it has extended its offer to provide AurionGold shareholders and their board the opportunity to consider what course of action they should take.

The extension came on the same day Placer agreed to lower its broker inducement fee to 0.75% from 1.5% of the value of the consideration payable to accepting shareholders, up to a maximum of $750. Acceptances tendered by 1:30 p.m. (AEST) on August 6 will be paid the original 1.5% fee. AurionGold had raised concerns with the Australian Takeovers Panel that the fee was too high; the panel agreed.

AurionGold’s CEO, Terry Burgess, said in a prepared statement, “We are pleased that the Takeovers panel recognised our concerns that the size of the fee offered by placer Dome had the possibility of inducing brokers to place undue, and possibly coercive, pressure on their clients to accept the Placer Dome offer.

AurionGold’s board has steadfastly rejected Placer Dome’s advances since May 27, when the company originally launched its hostile bid. The board maintains that the offer is too low; still no competing bid has surfaced.

Nearly half of the shares tendered to Placer’s bid so far come from South African-based Harmony Gold (HGMCY-Q), which had a 9.8% stake to rank as AurionGold’s previous largest shareholder.

In early-afternoon trade the New York Stock Exchange on Aug. 7, Placer’s shares were US21 richer at US$8.60, bringing the value of Placer’s offer to A$3.15 per share. AurionGold shares ended the Aug. 7 trading session on the Australian Stock Exchange up A6 at A$3.11.