Central Sun Mining (TSX: T.CSM, Stock Forum) announced Tuesday morning that it has received a “superior proposal” from B2Gold Corp.(TSX: T.BTO, Stock Forum) for the acquisition of all of the issued and outstanding shares of the company by way of a plan of arrangement.
Under the deal, Central Sun shareholders would be entitled to receive 1.28 common shares of B2Gold for each Central Sun common share held.
In late December, Linear Gold Corp. (TSX: T.LRR, Stock Forum) announced that they signed an agreement to acquire Central Sun’s outstanding shares, with Central Sun shareholders receiving 0.4 Linear Gold common shares for each CSM common share held, valuing Central Sun at approximately $18.4 million.
The B2Gold proposal represents a 49.7% higher price than that offered by Linear Gold Inc. based on closing prices on January 26, says the company.
"The Board of Directors of Central Sun has carefully considered the proposed terms of the B2Gold Transaction as compared to the terms of the business combination with Linear Gold and, in consultation with our financial and legal advisors, has determined that the B2Gold Transaction would result in a transaction more favourable to the shareholders of Central Sun, from a financial point of view" said Stan Bharti, chairman of the board of directors of Central Sun.
Under the Linear Agreement, Central Sun may recommend or enter into an alternative transaction in lieu of the business combination with Linear Gold if the alternative transaction is determined to be a “Superior Proposal” by Central Sun's board of directors prior to the completion of the Linear deal and subject to Linear Gold's right to match the proposal.
Linear Gold president and CEO Wade K. Dawe responded to the announcement, saying "We are evaluating B2Gold's announcement of its bid for Central Sun Mining. Upon initial review, our analysis indicates that Linear Gold's proposal remains in the best interests of Central Sun shareholders, providing them with significantly higher attributable cash flow following completion of a merger. Linear Gold's much tighter capital structure and significantly lower operating and exploration cost structure compliment Central Sun's assets and maximize the return to Central Sun's shareholders.”
“Linear Gold retains the right to match any Superior Proposal for Central Sun and we will review the details of B2Gold's proposal to determine our response within the next four days, as provided in the merger agreement with Central Sun. We remain committed to completing the transaction with Central Sun on terms that we believe are in the best interests of both Linear Gold and Central Sun shareholders,” he added.
According to Central Sun, Linear Gold has the right to match the B2Gold Transaction until 5:00 p.m. EST on January 30.
Shares of Central Sun Mining jumped 37.8% to 62 cents Tuesday, while B2Gold climbed 1.9% to 52 cents and Linear Gold fell 13.8% to 94 cents.
On the Central Sun Bullboard Tuesday afternoon,Wealth1 said: “For those that picked this up late last year for peanuts, Merry Christmas. Good luck to all in your decisions[sic].”
