Cambior Inc (TSE) has made an offer to acquire between 30% to 60% of all the shares of Nova- Cogesco Resources (ME) at $1.50 per share. Cambior, which owns about 3.8% of the company, wants to increase its position in the junior, in order to be able to “exercise significant influence over the future strategic orientation of this company,” Cambior president Louis Gignac says. Nova has approximately 9.4 million shares outstanding on a fully diluted basis. The price tag for a 60% stake will be about $8.5 million.
Nova-Cogesco holds varying interests in several gold exploration properties in Quebec. The most significant is a 20% stake in the Silidor gold deposit which is expected to be in production in the early 1990s.
Management of Nova-Cogesco reacted quickly to the unsolicited bid by rejecting the $1.50 per share offer as being too low. Noting the impending production decision at Silidor, Stuart Lee, president of Nova, says that the Cambior offer does not reflect the fair market value of the company’s shares. MSV Resources (ME), which owns 22.1% of Nova, does not plan to tender its stock at the offered price. MSV shares common management with Nova-Cogesco.
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