Getty directors agree to accept Total offer

The board of directors of Getty Resources has advised its shareholders to accept the revised offer proposed by Total Resources. Although still claiming that Getty’s underlying value exceeds the $11 offered by Total, the company and financial advisor Wood Gundy are recommending the offer after failing to get a higher bid from other companies.

Total, which is an affiliate of Total Compagnie Francaise des Petroles of France, originally offered $10 per share for all the issued and outstanding shares of Getty. Total’s objective in bidding to acquire control of Getty is the latter company’s prized 49% interest in the Tundra gold deposit. Located in the N.W.T., the Tundra deposit hosts possible geological reserves of 26.4 million tons grading 0.18 oz gold per ton.

According to Getty, an evaluation of the Tundra interest completed by Wright Engineers determined that the 49% stake had a discounted net present value ranging from $140.5 million to $193.6 million assuming a varying future production rates from 4,000 to 6,000 tonnes per day. Adding the value of Getty’s other mineral property interests, Wood Gundy concluded that Getty’s asset value ranged between $14-$20 per share on a fully diluted basis.

Getty officers, directors and employees have agreed to tender their shares to Total. These shares represent a 36.1% interest in Getty, the company says.