UPDATE: European Goldfields Down Extra 3% as Recommends $2.5Bln Friendly Buy by Eldorado Gold, Which is Near Yr Lows
European Goldfields Limited (EGU.TO), which closed down 2.5% on Friday, has lost early gains that saw it jump to $12.14 from the off. It has now added another near 3% in losses to those of Friday 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, but it is down 12% and has hit a day low $13.47 today, leaving it near a year low $13.09.
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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