May 6 (Reuters) - Canada’s Augyva Mining Resources Inc said on Friday it will not make an offer to buy Niocan Inc , two days after its smaller peer signed an agreement with merchant bank Forbes & Manhattan for a private placement.
Augyva Mining said that Niocan’s private placement could be considered a defensive tactic in response to its intention to make an offer, it said in a statement.
In January, Augyva, which owns gold and base metal properties, had proposed to buy all of Niocan’s shares for cash or stock, or both, but has not yet made a formal offer.[ID:nASA01DGG]
On Wednesday, Forbes & Manhattan agreed to provide Niocan with the lead order for a private placement of 5.2 million shares of the rare earth mineral explorer for C$1.15 apiece.
The placement for a fourth of Niocan’s outstanding shares, is subject to a 16-day exclusivity period during which the company is barred from discussing or negotiating with any other party.
In March, Niocan’s largest shareholder, Nio-Metals Holdings LLC, also withdrew its offer to buy the company after disagreements over the valuation. [ID:nL3E7E419O]
Augyva Mining’s shares, which were halted earlier in the day, were trading up 3.5 percent at 59 Canadian cents on the Toronto Venture Exchange.
Niocan’s shares, which have gained 8 percent since Nio-Metals withdrew its offer, were down 3.5 percent at C$1.09 on the Toronto Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Prem Udayabhanu)