RE: RE: RE: RE: RE: RE: Do your diligence If I understand the merger agreement correctly . . .
If Aurizon doesn't get enough votes, then they only have to pay Hecla's expenses up to $8 mm. If ARZ accepts a better offer or AGI acquires more than 33.33% of shares prior to the vote, then Hecla is entitled to the full $27.2 mm termination fee. I wonder why ARZ didn't use a 19.9% cap instead of 33.3% cap.
If Mcclusky is telling the truth about having locked up 30% of ARZ shares, then its unlikely Aurizon will get enough votes for Hecla. Hecla will get a wire transfer within 2 business days reimbursing them for their expenses. At that point, HL can either raise their offer or go away.
ARZ bought themselves time with the HL deal and maybe they find another bidder. But AGI should wait until after the HL vote to acquire more shares.
It seems AGI will eventually get ARZ for the price they have offered . . . just a question of how long it takes.
Using today's closing prices, the AGI offer is worth $4.64 per ARZ share and the HL offer is worth $4.62. ARZ is trading at a 5.25% discount to the AGI offer. If we think the AGI deal closes in 6 months, then the annualized return is roughly 10.5%.
Make sense?