Meridian Gold (MNG-T, MDG-N) has rejected Yamana Golds (YRI-T, AUY-N, YAU-L) revised offer for the company on the basis that it still doesnt provide value to shareholders.
The unsolicited bid was originally made in July, but on August 14, Yamana upped the cash component by 85 to $4 per share, which is in addition to 2.235 of a Yamana common share for each Meridian share. Yamana also waived the due diligence access condition and extended the deadline to September 7.
Yamanas amended offer still falls short, said Meridian chairman Brian Kennedy in a statement. Given the lack of any meaningful improvement in the offer, the Board continues to believe that holding Meridian shares is preferable to accepting the inadequate Yamana offer.
Meridian says the new offer represented only a 2.9% increase to the total deal as of the date of the changed bid.
The company says its financial advisors at BMO Capital Markets and Goldman, Sachs & Co. also considered the deal inadequate.
If two-thirds of Meridian shareholders had accepted a bid by Yamana, Yamana would have first acquired Northern Orion Resources (NN)-T, NTO-A) for $940 million. The combined company would then have bought Meridian.
Yamana shares rose about 2% today to $10.48 apiece on a trading volume of more than 4 million shares.
Meridian shares rose about 1% today, or 34 to $26.30 on a trading volume of more than 1 million.
Northern Orion shares slid less than 1% to $4.65 on a trading volume of 2.2 million shares.
On July 19, when Yamana made its formal offer for Meridian, Yamanas share price closed at $13.40. Meridian shares closed at $31.58.
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