New Gold starts formal takeover bid for Rainy River Resources
TORONTO (miningweekly.com) – NYSE- and TSX-listed New Gold has formally started its takeover bid to buy Canadian precious metals explorer Rainy River Resources, the companies jointly announced on Tuesday.
The C$3.83-a-share offer represented a premium of 67% to the volume-weighted average price of Rainy River shares on the TSX for the 20 trading days ended May 30, the last trading day before the announcement of New Gold's intention to make the offer was first made.
Rainy River’s flagship asset is an advanced-exploration stage gold project, in Ontario, which has a National Instrument 43-101-compliant gold reserve of four-million ounces.
Under terms of the friendly takeover bid, Rainy River shareholders would be entitled to receive, at their option, either C$3.83 in cash or half a New Gold share, in each case subject to proration, for each Rainy River share they owned.
The maximum amount of cash payable by New Gold under the offer would total about C$198-million and the maximum number of shares issuable by New Gold would total about 25.8-million, based on the number of Rainy River shares outstanding on May 30, on a fully diluted basis, as such term is defined in the offer.
The offer was subject to customary conditions, including that a minimum of 66.66% of the outstanding Rainy River shares be tendered to the offer. The offer valued the fully diluted in-the-money share capital of Rainy River, net of its current cash balance, at about C$310-million.
The companies said the offer was open for acceptance until 17:00 EST on July 24, unless the offer was extended or withdrawn.
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