Barrick Gold Corp. (ABX, ABX.TO), a gold mining company, Thursday announced submission of a binding all cash offer of C$6.75 per share aggregating C$410 million to the Board of Directors of Cadence Energy Inc. (CDS.TO).
Under this offer, Barrick will make a takeover bid to all shareholders of Cadence open for acceptance for 35 days subject to customary conditions, including that 66 2/3% of the Cadence Shares are tendered to the take-over bid.
Cadence's existing agreement with Daylight Resources, provides Daylight the right to match Barrick's offer. Daylight's right to match Barrick's offer would expire on July 21. If Daylight does not match Barrick's offer, Cadence and Barrick will enter into a support agreement in the form attached to Barrick's offer and Barrick will proceed with the take-over bid.
Barrick Gold said that its offer to acquire Cadence is an innovative response to energy cost challenges facing the mining industry. Cadence's production is expected to provide a long-term economic hedge of about one-quarter of Barrick's annual direct oil consumption and a considerable portion of its natural gas consumption.
Barrick Gold said that its offer represents a 17.4% premium over the implied value of the Daylight offer, based on Daylight's closing price on July 16, 2008.
Shares of Barrick Gold are currently trading at $48.05, down 35 cents or 0.72% on a volume of 2.77 million shares.
CDS.TO is currently trading at C$6.76, up 56 cents or 9.03% on Toronto Stock Exchange.
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