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New Gold Inc. (TSX:NGD, NYSE:NGD) and Rainy River Resources Ltd.(TSX:RR) announced that they have entered into an acquisition agreement, where New Gold will acquire outstanding common shares of Rainy River.
As quoted in the press release:
New Gold Inc. (TSX:NGD, NYSE:NGD) and Rainy River Resources Ltd.(TSX:RR) announced that they have entered into an acquisition agreement, where New Gold will acquire outstanding common shares of Rainy River.
As quoted in the press release:
Under the terms of the Agreement, New Gold will offer, at the election of each holder of Rainy River common shares, 0.5 of a common share of New Gold or $3.83 in cash, in each case subject to pro ration (the “Offer”). The Offer represents a premium of 42% over the closing price of the Rainy River shares on the Toronto Stock Exchange on May 30, 2013, the last day of trading prior to announcement of the Offer, and a 67% premium to Rainy River’s 20-day volume weighted average trading price. The maximum number of New Gold shares to be issued will be approximately 25.8 million and the maximum cash consideration will be approximately $198 million. The Offer values the fully-diluted in-the-money share capital of Rainy River, net of Rainy River’s current cash balance, at approximately $310 million.
New Gold’s Executive Chairman, Randall Oliphant, said:
We have followed Rainy River for some time and see this as an opportune time to add this great asset to our portfolio. We view the combination of Rainy River’s ideal location, sizeable reserve, robust production potential and experienced team as presenting a truly compelling opportunity.
To view the whole press release, click here.