Red Back Mining drops bid for Moto Goldmines
Last Updated: Wednesday, August 5, 2009 | 4:59 PM ET
CBC News
Canadian gold miner Red Back Mining Inc. has decided not to pursue its bid to buy Moto Goldmines Ltd. after Moto's board backed a $546 million takeover offer from Randgold Resources Ltd.
Moto said Wednesday that it was recommending shareholders accept the offer, which is a combination of cash and shares.
Randgold said it expects to issue 3.9 million shares and pay a total of $244 million US in cash to Moto shareholders.
Red Back, which is based in Vancouver, will collect a $15.25 million termination fee from Moto. Red Back said it would not exercise its right to match the Randgold bid.
Moto's key asset is a 70 per cent interest in a gold project in Congo, which it describes as one of the largest undeveloped gold deposits in Africa.
Randgold's partner in the offer is AngloGold Ashanti, which will put up cash in exchange for an indirect 50 per cent interest in Moto.
All of the mining companies, including Red Back, operate projects in Africa.
Shares of Red Back gained 47 cents to $10.69 while Moto's shares closed down 19 cents to $4.81 on the Toronto Stock Exchange.
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