Barrick announces agreement to acquire Equinox
Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or “the Company”) announced today that it has entered into a support agreement with Equinox Minerals Limited (TSX:EQN)(ASX:EQN)(“Equinox”) for Barrick to acquire, through an all-cash offer, all of the issued and outstanding common shares of Equinox (including the shares represented by Equinox’s CHESS Depositary Interests) by way of a friendly take-over offer (the “Offer”). The Offer is for C$8.15 per Equinox share in cash, or a total of approximately C$7.3 billion. The Offer represents a 30% premium based on Equinox’s closing share price on the Toronto Stock Exchange on February 25, 2011 (the last trading day before Equinox announced its intention to make a take-over bid for the common shares of Lundin Mining Corporation). The Offer also represents a 16% premium over the per share price under the offer for Equinox proposed by Minmetals Resources Ltd. on April 3, 2011 (which offer has not yet commenced).
Aaron Regent, President and CEO of Barrick said: “The acquisition of Equinox would add a high-quality, long-life asset to our portfolio and is consistent with our strategy of increasing gold and copper reserves through exploration and acquisitions. The transaction is expected to be immediately accretive to cash flow and earnings on a per share basis. It does not dilute our shareholders’ gold exposure per share, and it enhances copper exposure and leverage per share in a strong copper price environment. Combined with our Zaldivar mine and Cerro Casale project in Chile, this acquisition would position Barrick with significant production growth potential in two of the most prolific copper-producing regions of the world. This will be in addition to our targeted growth in annual gold production to 9 million ounces within the next five years.”
The Board of Directors of Equinox, after consultation with its financial and legal advisors, has unanimously approved entering into the support agreement and recommends that Equinox shareholders tender to the Offer. Each of CIBC World Markets Inc., Goldman Sachs & Co., and TD Securities Inc., the financial advisors to Equinox, has provided a verbal opinion to the effect that, as of the date of such opinions and subject to the assumptions, limitations, and qualifications stated in such opinions, the consideration proposed to be paid to the holders of Equinox common shares (other than Barrick and its affiliates) pursuant to the Offer is fair from a financial point of view to such holders.
Craig Williams, President and CEO of Equinox said: “We are very pleased to support this Offer. The Offer allows our shareholders to realize immediate value and also positions our operations and employees as part of a world class mining company. We believe this Offer is superior to the public proposal made by Minmetals in terms of certainty and value. Given the immediate value creation opportunity, we are recommending our shareholders tender to the Barrick Offer.”
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