Golden Star extends its bid

Golden Star Resources (GSC-T) has withdrawn its request that the Ontario Securities Commission set aside Iamgold‘s (IMG-T) poison-pill plan, after inking a confidentiality agreement that gives it access to Iamgold’s books.

Golden Star has also again extended its bid for Iamgold beyond Aug. 15. That’s the day Iamgold’s recently adopted one-month shareholder rights plan is set to expire. That plan would allow shareholders to buy additional shares at half the going rate, thereby flooding the market and making a takeover prohibitively expensive. The plan is triggered by a bid for at least 20% of Iamgold’s shares. Golden Star had appealed to the OSC to set aside the plan asserting that it was “an improper defensive response” to its takeover bid.

Golden Star’s bid stands at either 1.25 of its shares or 1.15 shares plus 50 for each Iamgold share. The company will also pay another 20 per share provided there is no break fee payable owing to the failure of the merger plans between Iamgold and Wheaton River Minerals (WRM-T). The bid is subject to satisfactory due diligence. Iamgold has rejected the bid calling it “inadequate, from a financial point of view.”

The latest agreement will grant Golden Star access to Iamgold’s confidential information on the same basis as agreed to by several other interested parties that are currently conducting due diligence under similar agreements. The new deadline on Golden Star’s bid means Iamgold’s rights plan will not be triggered.

“We are pleased that the process, which we feel is in the best interests of Iamgold shareholders, can now proceed to a conclusion,” said Iamgold CEO Joseph Conway in a prepared statement. “The special committee believes that it is essential to maintain a level playing field for all bidders and that now all interested parties, including Golden Star, will have the same information upon which to base their proposals.”

Iamgold expects to receive proposals for review by its special committee and RBC Capital Markets before Aug. 15; the board will then follow up with a recommendation to shareholders.

Shares in Iamgold were off 11 at $7.93, while Golden Star’s issue was 6 lower at $5.54 in late morning trading following the news on July 23.