European Goldfields Recommends C$2.5 billion Friendly Acquisition by Eldorado Gold
European Goldfields Limited (EGU.TO), which closed down 2.5% on Friday, is likely to get a boost today after announcing Sunday that it has signed an agreement with Eldorado Gold Corporation (ELD.TO) under which Eldorado proposes to acquire all of the issued and outstanding shares of European Goldfields via a plan of arrangement under the Yukon Business Corporations Act.
Consideration for the transaction will be Eldorado shares, with European Goldfields shareholders offered 0.85 Eldorado shares and C$0.0001 in cash for each European Goldfields share they own. The transaction values EGU at approximately $2.5 billion or $13.08 per share, based on the closing price of Eldorado on the TSX on December 16, 2011. Eldorado closed Friday up nearly 2% at $15.39.
The European Goldfields Directors unanimously recommend that European Goldfields shareholders vote in favour of the proposed Arrangement, and each Director intends to vote all of the European Goldfields shares they own or control at the date of the Arrangement meeting in favour of the Arrangement, in the absence of a superior proposal.
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