* Deal to create a new intermediate gold miner
* Deal unanimously approved by boards of both companies
* Anatolia shares down 6.4 pct on Toronto Stock Exchange
(Changes dateline, adds details, background)
By Euan Rocha
TORONTO, Sept 8 (Reuters) - Canada’s Anatolia Minerals Development Ltd ANO.TO said on Wednesday it plans to acquire Australia’s Avoca Resources AVO.AX for C$1.08 billion ($1.04 billion), creating a new intermediate gold miner focused on projects in Turkey and Australia.
The offer represents a premium of about 9 percent to Avoca’s Wednesday close of A$3.34 on the Australian Stock Exchange. Under the deal, each Avoca shareholder will receive 0.4453 common shares of Anatolia for each ordinary share of Avoca tendered.
The combined company, with a market capitalization of about C$2 billion, will take the name Alacer Gold Corp and its shares will trade on both the Toronto Stock Exchange and the Australian Stock Exchange.
Both board of directors have recommended the deal, which is structured as a merger of equals. Pala Investments, Avoca’s largest shareholder, has also said it intends to support the deal in the absence of a superior proposal.
Near-record gold prices have fueled a spate of deals in the gold sector this year, with the Anatolia-Avoca deal coming on the heels of Goldcorp’s (G.TO) C$3.6 billion bid to acquire Australian-listed Andean Resources AND.AX. [ID:nSGE685085] [ID:nN03134126]
For a DEALTALK on gold deals [ID:nSGE67T085]
For a FACTBOX on gold M&As [ID:nSGE6820GI]
Anatolia is focused on the development of three key projects in Turkey. Its flagship Copler gold-silver project is set to begin production later in 2010. Avoca, which owns mines in southwestern Australia, expects to produce about 280,000 ounces of gold in fiscal 2011.
Anatolia’s shareholders will benefit from Avoca’s strong development and operating experience, said Anatolia Chief Executive Ed Dowling, adding that Anatolia was also reducing risks by diversifying into Australia.
The deal is subject to the approval of shareholders of both companies and regulatory approvals in both Australia and Canada.
Shares of Anatolia were down 6.4 percent to C$7.31 in morning trade on the Toronto Stock Exchange.
In a joint statement, the companies said Alacer Gold’s board will have nine members, with four each from the current Anatolia and Avoca boards, plus one representative from Pala.
Avoca Chairman Rob Reynolds will assume the role of non-executive chairman of Alacer Gold, while Anatolia’s Dowling will serve as the CEO of the new company, which will have headquarters in Denver, Colorado.
The deal is expected to close in December 2010, or early in 2011. Alacer is expected to produce 600,000 ounces of gold in 2013, with output rising to 800,000 ounces by 2015.
BMO Capital Markets acted as Anatolia’s financial adviser, while Goldman Sachs acted on behalf of Avoca. ($1= $1.04 Canadian) (Reporting by Euan Rocha in Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Frank McGurty)