Kerr shareholders OK Minnova sale

At a special meeting held recently in Toronto, shareholders of Kerr Addison Mines(TSE) approved the sale of the company’s 50.4% equity interest in Minnova (TSE) to Metall Mining (TSE) for a price not to exceed $136.6 million.

The purchase price of Kerr’s 7,248,996 shares will be a minimum of $18.10 and a maximum of $18.85; the exact purchase price depends on Minnova’s 1992 net income.

The sale is expected to net Kerr approximately $40 million. Kerr President Andre Fortier says that most of the proceeds will be used to pay down the company’s long- and short-term debt, and maximize shareholder equity. Upon completion of the sale of the Minnova shares to Metall, the company’s primary assets will be:

— 7.4 million common shares (3.9%) of Noranda (TSE),

— 6.2 million common shares (30.1%) of Anderson Exploration, an oil and gas producer,

— about $56.7 million in assets relating to the disposition of the company’s holdings in oil and gas producer Canadian Hunter Exploration (including a $35.1-million Noranda promissory note),

— a 9.8% joint venture interest in Canadian Electrolytic Zinc’s reduction plant at Valleyfield, Que.,

— about $70 million in cash, net of long-term debt, and

— a 50% interest in a joint venture with Minnova covering over 100 exploration properties in Canada, the U.S. and Central America. Securities firm Nesbitt Thomson Inc. feels that in order to simplify its corporate structure and gain access to Kerr’s large cash balance, Noranda may be preparing to acquire all the outstanding shares of Kerr Addison. Having compared Kerr’s investment holdings and assets against its liabilities, analysts at Nesbitt Thomson believe that shares in Kerr are currently trading at a 19% discount to the company’s net asset value. This discount is typical for a holding company.