A quick read of the Stockhouse Bullboards reveals that shareholders are unhappy with New Gold Inc.’s (TSX: T.NGD, Stock Forum) takeover offer for Bayfield Ventures Corp. (TSX: V.BYV, Stock Forum) and its northwestern Ontario mineral properties.
With an eye on Bayfields’s Burns Block gold project, New Gold is offering 21 cents for each Bayfield share in an all-stock deal worth $16.6 million.
Bayfields’s flagship Burns Block project is surrounded by New Gold’s $885 million Rainy River gold project, which awaits environmental approval. Burns Block also adjoins the immediate east of New Gold’s multi-million ounce ODM17 gold-silver deposit.
However, some Stockhouse posters say Bayfield should have held out for a better offer.
“How asinine is selling out at almost the 52-week low,’’ writes Gunzod in a Bayfield Ventures Post. “As shareholders, can we not put up some kind of fight to get a fairer deal?”
“Bad deal for current shareholders,’’ adds nor-easter. “Company directors have done an awful job.’’
That view was supported by Calico. “There is nothing fair (no matter who says it is) about this deal for Bayfield shareholders,’’ Calico writes.
“It’s opportunistic and predatory, coming at a time when gold companies have been pushed to the dumpster by big money manipulators and at a time when tax-loss selling is at its peak.’’
Bayfield Ventures shares rose 8% to 20 cents Tuesday, leaving a market cap of $15.8 million, based on 79.2 million shares outstanding.
New Gold jumped 5% to $4.30, leaving a market cap of $2.2 billion, based on 504.5 million shares outstanding. The 52-week range is $7.28 and $3.85.
New Gold said in a press release that the Bayfield board has pledged unanimous support for the deal. New Gold has locked up support from a group of directors, officers and other shareholders, with approximately 3.3% of the outstanding shares.
The proposed arrangement is subject to a favourable vote by 66 and 2/3% of the votes cast by Bayfield shareholders. It must also secure the necessary court and regulatory approvals.