By: Liezel Hill
Published on 4th December 2008
Updated 36 minutes ago

TORONTO (miningweekly.com) - Vancouver's MAG Silver insisted on Thursday that it had no discussions with its joint-venture partner and the world's biggest primary silver producer, Fresnillo, about a potential buyout of the smaller company.

Fresnillo has said that it will offer $4,54 a share in cash for the MAG shares, in what has been dubbed a "take-under" because the offer was lower that MAG's closing share price on the day before the announcement, of C$4,96 a share (below $4,00 at current exchange rates).

"We are a little mystified by Fresnillo's actions," said MAG CEO Dan MacInnis.

MAG issued a statement in response to comments by Fresnillo that there had been "extensive prebid contact" between the two companies, asserting that this was not true.

"MAG wishes to clarify that there have never been any offers, discussions or negotiations of any nature between MAG and Fresnillo or between their respective representatives and agents about any acquisition of MAG by Fresnillo," the firm said.

The company will respond formally to the offer "in due course".

Fresnillo and its subsidiaries already own about 19,8% of MAG, but Canadian securities law dictates that MAG must obtain a formal independent valuation before the takeover offer can be mailed to shareholders.

The two companies have a joint venture on the Juanicipio deposit, in Mexico.
Editor: Liezel Hill