July 31, 2012 / 12:52 AM / 5 years ago

U.S. Silver asks shareholders to reject Hecla's hostile bid

2 Min Read

(Reuters) - U.S. Silver Corp USA.TO urged shareholders to reject Hecla Mining Co's HL.N hostile bid, calling it inadequate and highly opportunistic, and asked them to vote in favor of an earlier offer by RX Gold & Silver Inc RXE.V.

Hecla last week made an all-cash offer of C$110.7 million ($110.07 million) for U.S. Silver, a month after the Canadian company agreed to be bought by RX Gold.

U.S. Silver requires two-thirds of the shares voting at the shareholder meeting to approve its deal with RX Gold, Chief Executive Gordon Pridham told Reuters.

"At this stage in the game about 82 percent of the shares voted are voting in favor of our transaction with RX Gold," Pridham said.

U.S. Silver shareholders have the right to withdraw or amend their vote ahead of the August 7 shareholder meeting.

Pridham, however, has kept the door open for potential negotiations with Hecla if the company were to return with a revised offer.

"At C$1.80 per share we don't think the Hecla offer is of interest to us. Were they to come back and want to have discussions at a different price level or on some different basis and consideration, of course we would have a look at that."

Hecla last week said its offer was superior to the "imputed offer price" of C$1.41 under the RX proposal.

Hecla, in a separate statement on Monday, urged U.S. Silver shareholders to vote against the RX Gold transaction.

"If your board won't protect your right to evaluate the all-cash offer from Hecla ...,it is time to take matters into your own hands," Hecla Chief Executive Phillips Baker said.

Hecla shares closed down 0.6 percent at $4.62 on the New York Stock Exchange. RX Gold shares rose 1.9 percent to 27.5 Canadian cents on the Toronto Venture Exchange.

($1 = 1.0058 Canadian dollars)

Reporting by Euan Rocha in Toronto, Swetha Gopinath and Eileen Anupa Soreng in Bangalore; Editing by Supriya Kurane, Sriraj Kalluvila and Muralikumar Anantharaman

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