It came a little surprise this morning that Moto Goldmines (TSX: MGL, AIM: MOE) has decided that a cash and shares offer by FTSE 100 listed Randgold Resources (LSE: RRS) is superior a competing offer from Red Back Mining (TSX: RBI).
Randgold approached the Moto board with the proposal of a C$5.00 per share paper deal with a partial cash alternative, which, based on the prices specified at the time, valued Moto at approximately C$546 million.
Under the merger deal announced by Red Back Mining and Moto in June, Moto shareholders would receive 0.45 of a Red Back share for each Moto share, valuing the transaction at approximately C$513 million.
“Under the terms of the current agreement between Moto and Red Back, Red Back has a period of five business days to offer to amend the terms of that agreement. This period will expire at the end of the day (12:00 midnight (Vancouver time)) on Tuesday, August 4, 2009,” Moto Goldmines noted.
“If, within the Response Period, Red Back offers to amend the Red Back agreement such that the Moto Board determines that the proposed agreement with Randgold is no longer a superior proposal, Moto will be required to enter into an amendment to the existing Red Back agreement and implement the amended Red Back agreement. In that circumstance, the offer by Randgold to enter into a proposed transaction with Moto will be terminated.”
“If within the Response Period Red Back does not offer, or notifies the Moto Board that it does not intend to offer, to amend the Red Back agreement, or if the proposed Randgold transaction continues to be superior to any proposed amendment to the Red Back agreement, Moto intends to terminate the Red Back agreement, pay to Red back the agreed break fee of C$15.25 million, and accept Randgold's offer. In that event, the directors and officers of Moto will enter into voting agreements with respect to the transaction with Randgold.”
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