Aurizon Mines Ltd. (AZK, ARZ.TO) unanimously recommended that shareholders reject the hostile take-over bid received from Alamos Gold Inc. (AGI.TO).
George Brack, Chair of the Special Committee of the Aurizon Board of Directors said, “This is a financially inadequate and opportunistic offer, timed to take advantage of a transition year for Aurizon that we believe will be the foundation of long-term value creation for our shareholders. It fails to compensate Aurizon shareholders for the true value of our assets. We also believe there is increased geopolitical and development risk associated with Alamos shares.”
The Aurizon Board of Directors also announced that it has adopted a shareholder rights plan to provide the Board with adequate time to identify, develop and negotiate value-enhancing alternatives, if appropriate, to any unsolicited take-over bid, including the Alamos Offer and to encourage equal treatment of shareholders in connection with any take-over bid offer. The company intends to seek shareholder ratification of the Rights Plan at a special meeting of shareholders to be held on March 7, 2013.
On January 14, 2013, Alamos Gold announced that it has commenced an offer to acquire Aurizon Mines for approximately C$780 million in cash and shares. The Offer would remain open until 5:00 p.m. (Toronto time) on February 19, 2013 unless withdrawn or extended.
Under the terms of the Offer, Alamos proposes to acquire all of the outstanding common shares of Aurizon for consideration value of C$4.65 per Aurizon Share. Each Aurizon shareholder can elect to receive consideration per Aurizon Share of either C$4.65 in cash or 0.2801 of an Alamos Share, subject in each case to pro-ration based on a maximum cash consideration of C$305 million and maximum number of Alamos Shares issued of 23.50 million.
The Offer reflects a premium of approximately 40% based on the closing price of C$3.33 for the Aurizon Shares on the TSX on January 9, 2013.
