Alamos drops bid to buy Aurizon Mines

Tue Mar 19, 2013 7:06pm EDT
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By Garima Goel

(Reuters) - Canadian miner Alamos Gold Inc AGI.TO dropped its offer to buy peer Aurizon Mines Ltd ARZ.TO, putting an end to its bidding war with Hecla Mining Co HL.N.

Alamos said it would not extend its offer for Aurizon shareholders to tender their shares after it failed to overturn a break-up fee payable to rival bidder Hecla. The company said it would not take up any Aurizon shares that were tendered to its offer.

A spokesperson for Alamos declined to comment on the percentage of Aurizon's shares that were tendered.

Alamos, which is Aurizon's largest shareholder with a 16.11 percent stake, made an unsolicited C$780 million ($759.16 million) offer in January. Hecla topped Alamos' bid with a friendly C$796 million offer on March 4.

If Alamos acquired more than a third of Aurizon's shares, the company would have to pay Hecla C$27.2 million as a break-up fee.

Alamos's Chief Executive John McCluskey had told Reuters on March 12 that the company was likely to walk away from the bid if it loses the regulatory ruling on the merits of the break fee committed to Hecla and a second poison pill adopted by Aurizon.

The British Columbia Securities Commission (BCSC) on Monday rejected Alamos' application against the break-up fee but ruled in favor of Alamos's application for the removal of the poison pill.

"The outcome is as we expected ... We are looking at alternative financing to what we have," Hecla CEO Phillips Baker told Reuters.   Continued...