Kirkland rejects C$1.44 billion Gold Fields, Silver Standard offer

Fri Nov 11, 2016 4:52pm EST
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By John Tilak and Nicole Mordant

TORONTO/VANCOUVER (Reuters) - Canada's Kirkland Lake Gold Inc said on Friday it rejected a previously unreported takeover offer from South Africa's Gold Fields Ltd and Silver Standard Resources valuing the business at C$1.44 billion ($1 billion).

Reuters reported earlier on Friday that Gold Fields and Silver Standard had made three joint, unsolicited bids for Kirkland and recently sweetened their offer to about C$1.4 billion. The names of the bidders had not been previously disclosed.

Kirkland said that after advice from its legal advisers and three separate financial advisers, it concluded the proposal was "not financially superior" to its own plan to acquire Newmarket Gold Inc for about C$1 billion in stock.

"As a result Kirkland Lake Gold is precluded by the terms of the arrangement agreement with Newmarket from engaging in any discussions with Gold Fields or Silver Standard concerning the revised proposal or providing any due diligence access to them," Kirkland said in a statement.

It also "strongly recommended" shareholders vote in favor of the Newmarket deal.

However, Harry Dobson, the former chairman of Kirkland who remains a shareholder, said he would be voting against the Newmarket deal.

"It's no secret that I don't like it. I'm not happy with the deal for the same reason the market wasn't happy," Dobson said in an interview, citing a drop in Kirkland's share price since the deal was announced.

The latest offer for Kirkland Lake represented a premium of more than 50 percent of its value on Thursday. Its shares, which were trading at C$7.42 just ahead of the news, jumped as much as 8 percent to hit C$8.17 before being halted on the Toronto Stock Exchange. The stock closed at C$8.04 on Friday.   Continued...