Franco-Nevada Corp Down 2% as moves to buy rival Gold Wheaton Gold Corp, which has hit a New Yr High
Gold royalty company Franco-Nevada Corp. (FNV.TO) is down 2% today after announcing plans to buy rival Gold Wheaton Gold Corp. (GLW.TO) for $830-million payable as to 60% in shares and 40% in cash.
GLW has hit a new yaer high of $5.12 with nearly 3 million shares traded.
Under the Arrangement, each Gold Wheaton Share will be exchanged for consideration consisting of 0.0934 of a common share in the capital of Franco-Nevada and cash in the amount of C$2.08 per Gold Wheaton Share implying a price of approximately C$5.20 per Gold Wheaton Share based on the closing price of the Franco-Nevada shares on December 10, 2010. On a fully diluted basis, the value of the transaction is over C$1 billion.
The consideration to be paid by Franco-Nevada represents a premium of approximately 19% over the closing price of the Gold Wheaton Shares on December 10, 2010 (C$4.38) and a premium of approximately 42% to the 60-day volume-weighted average price (C$3.67).
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