Alamos Gold makes $792M bid for Aurizon Mines

Canadian gold producer Alamos takes bigger stake in Aurizon, offers to buy company for $792M

Associated Press

NEW YORK (AP) -- Canadian gold producer Alamos Gold Inc. said Monday it now owns a 16 percent stake in competitor Aurizon Mines Ltd. and wants to buy the rest of the company for about $792 million.

Alamos said it bought 23.5 million shares of Aurizon between Thursday and Sunday, increasing its stake in Aurizon to 16 percent from about 2 percent. It is offering to buy Aurizon for 780 million Canadian dollars, or about $792 million, in cash and stock. Alamos said the per-share offer of 4.65 Canadian dollars is a premium of about 40 percent based on the Jan. 9 closing price of Aurizon shares on the Toronto Stock Exchange.

U.S.-listed shares of Aurizon, which operates mines in Quebec, rose $1.17, or 33.8 percent, to $4.63 in midday trading. Those shares are down 34 percent since Oct. 1.

Alamos, based in Toronto, runs a mine in Mexico. It is engaged in exploration and development activities in Mexico and Turkey. It said Aurizon shareholders can choose to receive 4.65 Canadian dollars or 0.2801 Alamos shares for each Aurizon share held. Alamos said its total consideration could be as much as 305 million Canadian dollars ($310 million) in cash and 23.5 million Alamos shares.

Alamos said it will become a leading intermediate gold company if the deal goes through, as it would have two mines, a $2.6 billion market capitalization, and steady production. It said the offer is fully financed, and major Aurizon shareholders support its bid. The purchase would not require approval from Alamos shareholders. The offer is scheduled to expire Feb. 19.

Alamos also said it has applied to list its shares on the New York Stock Exchange under the ticker symbol "AGI."

On the Toronto Stock Exchange, shares of Alamos fell 1.66 Canadian dollars, or 9.8 percent, to 15.26 Canadian dollars.

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