Kirkland Lake rejects alternative Gold Fields, Silver Standard bids valued at C$1.44bn

VANCOUVER (miningweekly.com) – Canadian miner Kirkland Lake Gold has rebuffed several alternative transactions, including three joint unsolicited offers by South Africa-based Gold Fields and Vancouver-based Silver Standard Resources, valued at up to C$1.44-billion.

In response to media rumours and a request on Friday by the Investment Industry Regulatory Organisation of Canada, Kirkland Lake issued a statement identifying the suitors and provided details of the sweetened offers, reaffirming that the revised proposal was not financially superior to the company's C$1-billion all-scrip deal with Newmarket Gold, announced on September 29.

Kirkland Lake acknowledged that it recently received a sweetened revised acquisition proposal from Silver Standard Resources worth C$1.44-billion payable in cash and Silver Standard shares. The latest offer represented a premium of about 50% to Kirkland Lake's market capitalisation Friday.

In an October 28 proxy circular, Kirkland Lake noted that it had received alternative bids, stopping short of providing further details.

Kirkland Lake advised that its board and special committee had determined after receiving advice from its legal advisers and three separate financial advisers, that the revised proposal was not financially superior to the Newmarket transaction. It also noted that it was precluded by the terms of the arrangement agreement with Newmarket from engaging in any discussions with Gold Fields or Silver Standard concerning the revised proposal or providing any due diligence access to them.

The board affirmed its belief that the Newmarket transaction was in the best interests of Kirkland Lake and its shareholders and “strongly” recommended that Kirkland shareholders vote in favour of it.

Under terms of the agreement with Newmarket Gold, once the deal has been completed, the combined company, retaining the Kirkland Lake Gold brand, will have a market cap of nearly C$2.4-billion, with yearly output of more than 500 000 oz of gold spread across seven mines in Ontario and Australia. The merger with Kirkland comes a little over a year after Newmarket completed a transformational merger of its own, pushing production up to about 200 000 oz/y.

Kirkland Lake shares listed on the TSX rose as much as 4% Friday to C$8.17 a share.