New Gold Inc. is taking over Western Goldfields Inc. in a share-exchange deal that will create a new mid-sized gold producer, the companies announced Wednesday.
New Gold will exchange one of its shares for each Western share, and throw in a microscopic cash payment of 1/100 of a cent per Western share.
Based on the companies' closing prices on the TSX on Tuesday, the offer represents a premium of 19.2 per cent for Western's stock, they said in a joint announcement.
New Gold stock closed down fell 23 cents to $2.07 in TSX trading. Western shares rose eight cents to $2.01.
The companies said their combined gold production from three mines is forecast to be about 335,000 ounces this year.
Mineable reserves will total 7.6 million ounces.
Based on year-end 2008 figures, the combined company will have cash of $171 million, long term investments of $77 million and debt of $275 million.
The boards of both companies have approved the deal. It requires the approval of two-thirds of the votes cast by shareholders of Western, and majority approval by New Gold shareholders.
Shareholder meetings are expected to be held in May, the companies said.
Once approved, existing New Gold shareholders will own 58 per cent of the combined company and Western shareholders 42 per cent.
There will be a new total of about 348 million shares outstanding.
The new company will operate the Mesquite Mine in California, Cerro San Pedro Mine in Mexico and Peak Mines in Australia.
New Gold shares have traded between 94 cents and $9.75 in the past year. Western has ranged from 50 cents to $3.90.
Share Tools
Top News Headlines
- Greece passes new austerity deal amid rioting
- Greek lawmakers have approved harsh new austerity measures demanded by bailout creditors to save the debt-crippled nation from bankruptcy, after riots in Athens and other cities left stores looted and burned and more than 120 people hurt. more »
- Quebec town 'heartbroken' after killing of woman, sisters
- A small Quebec town is in mourning Sunday after a Quebec man was charged with killing his nieces and his mother, who were found dead in their family home. more »
- Houston autopsy results withheld by police
- Whitney Houston was found in a hotel bathtub but it'll take weeks to determine precisely how she died, a Los Angeles coroner's official says. more »
- Musicians who died before their time
- The growing list of musicians who have died young. more »
Latest Business Headlines
- Air Canada reaches tentative deal with dispatchers
- Air Canada has reached a tentative collective agreement with the Canadian Airline Dispatchers Association, representing the airline's 74 flight dispatchers. more »
- Old Age Security untouched until 2020, Flaherty says
- Finance Minister Jim Flaherty says Canadians should expect no changes to Old Age Security benefits before 2020 or 2025, and details about reform would be outlined over more than one budget. more »
- CAW questions Caterpillar takeover of Electro-Motive
- The head of the Canadian Auto Workers is suggesting Caterpillar Inc. may not have followed foreign takeover rules in its 2010 purchase of the London, Ont., locomotive plant it has since shut down. more »
- Canada's trade surplus doubles in December
- Statistics Canada says exports rose 4.5 per cent in December and imports edged up 0.8 per cent, pushing the country's trade surplus with the rest of the world to $2.7 billion from $1.2 billion in November. more »
Lang & O'Leary Exchange
Markets
| Index | Last Trade | Change |
|---|---|---|
| TSX COMPOSITE | 12389.42 | -108.52 |
| DOW | 12801.23 | -89.23 |
| NASDAQ | 2903.88 | -23.35 |
| SP 500 | 1342.64 | -9.31 |
| NYSE COMPOSITE | 7992.05 | -89.2 |
| AMEX | 2417.98 | -18.65 |
| TSX-VENTURE | 1653.55 | -11.27 |
The data on this site is informational only and may be delayed; it is not intended as trading or investment advice and you should not rely on it as such.
Business Features
- Adele wins best album, best record Grammys
- Houston autopsy results withheld by police
- Quebec town 'heartbroken' after killing of woman, sisters
- Northern lights viewed from space
- Greece passes new austerity deal amid rioting
- Manitoba man dies after falling off moving SUV
- Doors blocked in fatal Manitoba trailer blaze
- Pop queen Whitney Houston dies at 48
- Former Stanley Park petting zoo goats feared slaughtered
