Eldorado Gold (EGO) to Acquire European Goldfields in C$2.5B Deal
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Eldorado Gold Corporation (NYSE: EGO) has entered into a definitive agreement with European Goldfields Limited pursuant to which Eldorado has agreed to acquire all of the issued and outstanding common shares of European Goldfields by way of a plan of arrangement under the Yukon Business Corporations Act.
Under the Arrangement, shareholders of European Goldfields will receive 0.85 Eldorado shares and C$0.0001 in cash per European Goldfields share. Each outstanding option of European Goldfields shall be exchanged for options of Eldorado that will entitle the holder to receive, upon the exercise thereof, Eldorado shares based upon the Exchange Ratio and otherwise on the same terms and conditions as in the original European Goldfields option. The total transaction value is approximately C$2.5 billion.
Details:
"Under the terms of the Arrangement, each European Goldfields shareholder will receive 0.85 common shares of Eldorado and C$0.0001 in cash per European Goldfields share. The transaction will be carried out by way of court-approved plan of arrangement and will require approval by at least 66 2/3% of the votes cast in person by the shareholders of European Goldfields at a special meeting of European Goldfields shareholders. The transaction is also subject to obtaining approval by a majority of Eldorado common shareholders at a special meeting of Eldorado shareholders. In addition to the shareholder and court approvals, the transaction is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature. It is anticipated that the shareholder meetings will be held in February 2012.
The Arrangement Agreement includes customary provisions, including no solicitation of alternative transactions, right to match superior proposals, mutual break fees and fiduciary-out provisions. Each of Eldorado and European Goldfields have agreed to pay a termination fee of C$75 million upon the occurrence of certain termination events or an expense fee up to C$30 million upon the occurrence of certain other termination events. European Goldfields has also agreed to postpone its special meeting of shareholders scheduled for December 22, 2011 to a date following the meetings of Eldorado and European Goldfields shareholders held to approve matters relating to the Arrangement.
Both companies' Boards of Directors have determined that the proposed transaction is fair and in the best interests of their respective shareholders based on a number of factors, including fairness opinions received from their respective financial advisors. Each company's Board of Directors approved the terms of the proposed Arrangement and recommends that their respective shareholders vote in favour of the business combination. GMP Securities L.P. and BoA Merrill Lynch have each provided fairness opinions to the Board of Directors of Eldorado. BMO Capital Markets and Lazard & Co., Limited provided fairness opinions to the Special Committee and to the Board of Directors of European Goldfields. Each of the directors and senior officers of Eldorado and European Goldfields have entered into voting support agreements and have agreed to vote in favour of the transaction. Additionally, one of European Goldfields' largest institutional shareholders, BlackRock Investment Management (UK) Limited who holds 7.3% of the basic shares outstanding, has entered into a lock-up agreement with Eldorado and has also agreed to vote in favour of the Arrangement.
Upon completion of the transaction, the current Eldorado and European Goldfields shareholders will hold approximately 78% and 22% of the combined company, respectively. Full details of the proposed transaction will be included in the management information circulars to be mailed to Eldorado and European Goldfields shareholders in mid-January 2012.
Eldorado has retained GMP Securities L.P. to act as financial advisor and Borden Ladner Gervais LLP to act as legal advisor.
Under the Arrangement, shareholders of European Goldfields will receive 0.85 Eldorado shares and C$0.0001 in cash per European Goldfields share. Each outstanding option of European Goldfields shall be exchanged for options of Eldorado that will entitle the holder to receive, upon the exercise thereof, Eldorado shares based upon the Exchange Ratio and otherwise on the same terms and conditions as in the original European Goldfields option. The total transaction value is approximately C$2.5 billion.
Details:
"Under the terms of the Arrangement, each European Goldfields shareholder will receive 0.85 common shares of Eldorado and C$0.0001 in cash per European Goldfields share. The transaction will be carried out by way of court-approved plan of arrangement and will require approval by at least 66 2/3% of the votes cast in person by the shareholders of European Goldfields at a special meeting of European Goldfields shareholders. The transaction is also subject to obtaining approval by a majority of Eldorado common shareholders at a special meeting of Eldorado shareholders. In addition to the shareholder and court approvals, the transaction is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature. It is anticipated that the shareholder meetings will be held in February 2012.
The Arrangement Agreement includes customary provisions, including no solicitation of alternative transactions, right to match superior proposals, mutual break fees and fiduciary-out provisions. Each of Eldorado and European Goldfields have agreed to pay a termination fee of C$75 million upon the occurrence of certain termination events or an expense fee up to C$30 million upon the occurrence of certain other termination events. European Goldfields has also agreed to postpone its special meeting of shareholders scheduled for December 22, 2011 to a date following the meetings of Eldorado and European Goldfields shareholders held to approve matters relating to the Arrangement.
Both companies' Boards of Directors have determined that the proposed transaction is fair and in the best interests of their respective shareholders based on a number of factors, including fairness opinions received from their respective financial advisors. Each company's Board of Directors approved the terms of the proposed Arrangement and recommends that their respective shareholders vote in favour of the business combination. GMP Securities L.P. and BoA Merrill Lynch have each provided fairness opinions to the Board of Directors of Eldorado. BMO Capital Markets and Lazard & Co., Limited provided fairness opinions to the Special Committee and to the Board of Directors of European Goldfields. Each of the directors and senior officers of Eldorado and European Goldfields have entered into voting support agreements and have agreed to vote in favour of the transaction. Additionally, one of European Goldfields' largest institutional shareholders, BlackRock Investment Management (UK) Limited who holds 7.3% of the basic shares outstanding, has entered into a lock-up agreement with Eldorado and has also agreed to vote in favour of the Arrangement.
Upon completion of the transaction, the current Eldorado and European Goldfields shareholders will hold approximately 78% and 22% of the combined company, respectively. Full details of the proposed transaction will be included in the management information circulars to be mailed to Eldorado and European Goldfields shareholders in mid-January 2012.
Eldorado has retained GMP Securities L.P. to act as financial advisor and Borden Ladner Gervais LLP to act as legal advisor.
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