Is it really adjourn, today's meeting ?Capital Gold backs new Gammon offer, to adjourn Friday meeting
Capital Gold, the subject of rival offers from friendly suitor Gammon Gold and hostile bidder Timmins Gold, said on Thursday its board of directors still views the proposed tie-up with Gammon as the better transaction.
Timmins and Gammon both announced increased offers for Capital on Tuesday, with Timmins adding a cash component of
,25 a share to the 2,27 of its own shares it was already offering.
Later that day, Gammon said it would increase the cash component in its offer by
,30 a share, bringing the total offer to 0,5209 of a Gammon share and $1,09 in cash for each Capital Gold share.
Both companies want to get control of Capital's flagship El Chanate mine in Mexico.
“The board has carefully considered both proposals and believes that the Gammon transaction continues to be the best transaction reasonably available to its stockholders,” Capital chairperson Steve Cooper said in a statement.
The Timmins offer valued Capital's shares at $5,82 a share, based on closing prices on Wednesday, while the Gammon offer was worth $5,37 a share. The offer values fluctuate constantly because of the share components.
The company said it will convene the scheduled special meeting of shareholders on Friday, but will call a vote on an adjournment, to allow the agreement with Gammon Gold to be amended to include the increased offer.
Capital also threw a few jabs at Timmins Gold in its statement on Thursday, noting that the addition of cash to the Timmins bid was a result of a loan from Sprott Resource Lending Partnership, “the terms of which Timmins has not yet disclosed”.
Capital said it also “continues to be concerned that Timmins does not have sufficient capital to execute its business plan”.
Like Capital, Timmins and Gammon both have precious-metals operations in Mexico.
Timmins said earlier this week that Sprott Asset Management, which owns about 12,5% of Capital, had indicated it would vote against the deal with Gammon, and back Timmins' own proposal.
The company has tried repeatedly to get the Capital board to negotiate a friendly deal, and eventually said last month it would take the offer straight to Capital shareholders.