VANCOUVER – In today's economic climate it appears difficult to take over an unwilling target. The board of directors at Aurizon Mines has unanimously recommended that its shareholders reject the hostile offer from Alamos Gold of Toronto. (A similar scenario is playing out between Inmet Mining and its suitor, First Quantum.)
George Brack, chair of Aurizon's special committee examining the Alamos offer, 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."
Again the reasons put forward for the rejection are reminiscent of similar arguments expressed earlier this week. The offered price was a 4.1% discount to the closing price of Aurizon's shares the day it was made and a 21% discount to Aurizon's 52-week high. The Casa Berardi gold project is in transition phase of its mine plan; therefore, recent operating results are not reflective of normal operations. Aurizon shareholders would hold only 16% of the combined company, significantly decreasing their exposure to Aurizon's assets.
Aurizon has adopted a shareholder rights plan to give it time to seek alternatives to the Alamos bid.
Detailed reasons for the board's recommendation are at Aurizon.com/MaximizeValue.