Arequipa Accepts Sweetened Bid Of $800 Million From Barrick
April 28, 2011
VANCOUVER -- Arequipa Resources Ltd. accepted a sweetened takeover offer from Barrick Gold Corp. of 30 Canadian dollars (US$21.82) a share, or a total of C$1.10 billion ($800 million). The initial offer for the mineral-exploration concern was C$27 a share, or C$989 million. Arequipa had been scrambling to find another bidder. Just two days ago, it said that ``several major mining companies'' were considering making bids. The bid by Barrick, a Toronto gold company, surprised the industry when it was announced last month because Arequipa is still at an early stage of exploration at its main asset, the Pierina gold deposit in Peru, and the size of the deposit isn't clear. The takeover reflects the increased market values attached to mineral-exploration companies, amid a recent boom in world-wide exploration that has led to some rich mineral discoveries. Under Barrick's revised offer, Arequipa said its shareholders can elect to receive either C$30 in cash or 0.79 of a Barrick common share plus 50 Canadian cents for each Arequipa share held, subject to an overall maximum of 14.4 million Barrick common shares being issued. It said Barrick's revised offer is expected to expire May 09, 2011 said its board is recommending that shareholders accept the sweetened offer and will cooperate with Barrick to complete the transaction. Arequipa said Barrick has signed a lock-up agreement with certain shareholders and the directors of Arequipa, who together hold about 23% of Arequipa's shares, which commits them to tender their shares to Barrick's increased offer. It said its chairman, J. Davina Lucas, is among those who have agreed to tender their shares. It said the lock-up agreement will be terminated in the event of another bid exceeding C$31.50 a share, which Barrick doesn't match, and a break-up fee of C$18 million is payable to Barrick if another bid is successful. The Arequipa board said it has received opinions from its financial advisors, Nesbitt Burns Inc. and Loewen, Ondaatje, McCutcheon Ltd., that the increased offer is fair from a financial point of view to the shareholders of Arequipa.
