On January 14, 2013, Alamos Gold Inc. (Alamos) commenced an unsolicited offer to acquire Aurizon Mines Ltd. (Aurizon) for approximately C$780 million in cash and shares (the Offer).
Under the terms of the Offer, Alamos proposed to acquire all of the outstanding common shares of Aurizon (Aurizon Shares) for consideration value of C$4.65 per Aurizon Share. Each Aurizon shareholder could elect to receive consideration per Aurizon Share of either C$4.65 in cash or 0.2801 of an Alamos Share, subject in each case to pro-ration based on a maximum cash consideration of C$305 million and maximum number of Alamos Shares issued of 23,500,000. Immediately prior to the announcement of the Offer, Alamos had acquired additional Aurizon shares in private transactions to own over 16% of the Aurizon shares.
The Offer reflected a premium of approximately 40% based on the closing price of C$3.33 for the Aurizon Shares on the TSX on January 9, 2013, and a premium of approximately 37% based on the volume-weighted average price of the Aurizon Shares on the TSX for the 20 trading days ended January 9, 2013.
In response to Alamos’ Offer, Aurizon adopted a shareholder rights plan and initiated a process seeking alternatives. By consent of the parties, Aurizon agreed to terminate its rights plan effective March 4, 2013, and Alamos agreed to extend the Offer to March 5, 2013.
On March 4, 2013, Aurizon announced that it had entered into an arrangement agreement with Hecla Mining Co. (Hecla) pursuant to which Hecla agreed to acquire all of the issued and outstanding Alamos shares. The arrangement must be approved by at least two thirds of the shares voted at a special meeting of Aurizon’s shareholders. On March 6, 2013 Alamos varied the Offer by removing the minimum tender condition. Aurizon subsequently implemented a second rights plan. On March 12, 2013, Alamos applied to the British Columbia Securities Commission for an order: (i) to cease trade the second Aurizon rights plan; and (ii) to prevent the payment of a break fee to Hecla in the event the Offer was successful.
On March 8, 2013, the British Columbia Securities Commission ordered that this second rights plan be cease traded immediately. The break fee provision remained in place. Accordingly, the conditions to Alamos’ Offer were not satisfied and the Offer expired on March 19, 2013. A meeting of Aurizon’s shareholders to consider the proposed arrangement with Hecla was called for May 9, 2013.
On June 3, 2013, Hecla completed its acquisition of Aurizon for C$514 million in cash and issued approximately 57 million shares of its common stock. Aurizon was delisted from the TSX at the close of trading on June 5, 2013.
Following the Alamos bid, competing proposals from Quebec and other Canadian securities regulators on defensive tactics have emerged; as a result, bidders with circumstances similar to the ones that Alamos faced may be better positioned to succeed in the future.
Alamos Gold is a Canadian-based gold producer that owns and operates the Mulatos mine in Mexico and has exploration and development activities in Mexico and Turkey.
Further information can be found on Alamos’ website.