DAVID WARNER
RTGAM
Philadelphia - Shareholders of Capital Gold approved a $420-million (U.S.) friendly takeover bid from Gammon Gold Friday, ending a battle to acquire the company that has raged more than six months.
Capital Gold said a majority of its shareholders voted in favor of the deal with Gammon, eschewing a rival bid from Timmins Gold.
"We think this is the best deal for the shareholders and we are glad they agreed," Capital Gold Chairman Steve Cooper told Reuters after the shareholder vote in Philadelphia. The company did not disclose the percentage of shares voted in favor or against the deal.
Gammon and Timmins Gold had battled for months to win control of Capital Gold, which owns the El Chanate mine in northern Mexico, a region where both Gammon and Timmins already own operating gold mines.
Capital Gold's board and two proxy advisory firms - ISS and Glass Lewis - had advised shareholders to vote in favor of the Gammon offer.
Canada's Gammon offered $1.09 plus 0.5209 of a Gammon share for each Capital share, valuing the U.S. company at about $420-million based on Thursday's close.
The Timmins offer of 2.27 Timmins' shares plus $0.25 in cash for each Capital share, valued the company at roughly $396-million, based on Thursday's close.
The Timmins offer was previously worth more than the Gammon offer, but Gammon's shares surged after the company announced strong fourth-quarter results last week.
Timmins' shares were down 1.99 per cent in midmorning trade Friday in Toronto at $2.46 (Canadian). Gammon stock was down 2.97 per cent at $9.79.
