Another Takeover on the Cheap
posted on
Aug 07, 2012 07:18PM
Here is the 2 year chart for Avion Gold (TSX: AVR). Look familiar?
Avion Gold Corporation Announces Acquisition by Endeavour Mining Corporation
TORONTO, ONTARIO -- (Marketwire) -- 08/07/12 -- Avion Gold Corporation ("Avion") (TSX:AVR)(OTCQX:AVGCF) is pleased to announce today that it has entered into a definitive arrangement agreement (the "Arrangement Agreement") with Endeavour Mining Corporation ("Endeavour"), pursuant to which Endeavour has agreed to acquire all of the issued and outstanding common shares ("Avion Shares") of Avion by way of a statutory plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement").
Under the terms of the Arrangement Agreement, each Avion shareholder will receive 0.365 (the "Exchange Ratio") of an ordinary share of Endeavour for each Avion Share held. Each shareholder of Avion that is a Canadian resident may elect for tax purposes to receive Avion Exchangeable Preferred Shares ("Exchangeable Shares") on the basis of the Exchange Ratio. Each Exchangeable Share will be exchangeable for one ordinary shares of Endeavour at the option of the holder (the "Arrangement").
Based on the closing price of the Endeavour Shares on the Toronto Stock Exchange (the "TSX") of $2.40 on August 7, 2012, the last trading day prior to the announcement of the Arrangement, the share consideration represents a 56.4% premium to the closing price of Avion Shares and a 70% premium over the volume-weighted average trading price ("VWAP") of the Avion Shares on the TSX for the last 20 trading days, on a VWAP to VWAP basis. On a pro-forma basis, Avion's shareholders are expected to hold approximately 39.8% of Endeavour on completion of the Arrangement.
John Begeman, President, CEO and Director of Avion, states "We are very pleased with the proposed transaction as it provides our shareholders with a substantial premium and meaningful ownership in a stronger combined West African-focused mining company with the financial resources to withstand a protracted lull in the capital markets. We believe this transaction to be mutually beneficial to both parties and strategically positions the new company well for future value creation. I look forward to my new role as a director of the new, stronger company."
http://www.aviongoldcorp.com/News/News-Details/2012/Avion-Gold-Corporation-Announces-Acquisition-by-Endeavour-Mining-Corporation-and-a-US20000000-Exchangeable-Debt-Financing1130/default.aspx