Eldorado Gold bids for European Goldfields to create new mid-tier producer (GLD, EGO, EGFDF)
The deal values European Goldfields at $12.50 a share, but Canada-based EGFDF was down 61 cents to close at $10.89, an odd reaction to a takeover bid.
Shareholders from both companies must approve of the deal.
The Wall Street Journal stated that the deal will create "the leading growth-oriented intermediate gold producer."
European Goldfields is active throughout southeast Europe. It holds 95% interest in Stratoni, a lead/zinc/silver mine located in northeastern Greece, as well as other assets in Greece and Romania.
While 2011 has been a good year for the yellow metal, the shine has been wearing off lately. For the week, it is down more than 4%. Over the last month, it is off over 7%.
But with central banks buying and consumers in India and China loading up on gold , it should be rising in price again over the long term .