Canada’s Kinross Gold to buy Red Back Mining for $7.1 billion
03 Aug 2010
Kinross Gold Corp, Canada's third-largest gold miner yesterday said that it will buy the 90.7-per cent of Red Back Mining Inc that it does not already own in an all-stock transaction valued at around $7.1 billion.
The deal will allow the Toronto-based Kinross to broaden its footprint from its present mines located in the US, Brazil, Chile, Ecuador, Russia and Canada to West Africa.
Shareholders of Vancouver-based Red Back Mining will receive 1.778 Kinross common shares and 0.110 of a Kinross common share purchase warrant for each Red Back common share held.
Post transaction, the current Kinross shareholders will hold about 63 per cent of the combined company, while current shareholders of Red Back will hold approximately 37 per cent.
The value of the offer is C$30.50 per Red Back common share, representing a premium of approximately 21 per cent, based on 30 July 2010 closing price of Kinross.
The warrants are expected to be listed on the Toronto Stock Exchange exercisable for a four year term at an exercise price of $21.30, representing a 30 per cent premium on 30 July 2010 closing price of Kinross.