By Ashutosh Joshi
BANGALORE, July 31 (Reuters) - Canada's ATW Gold Corp on Friday terminated its agreement to acquire Kinbauri Gold Corp, after Kinbauri's board failed to confirm the deal and Orvana Minerals raised its rival all-cash bid for the company.
ATW, which offered a all-stock deal valued at C$49.6 million to acquire Kinbauri Gold earlier this month, said it was terminating the deal after Kinbauri failed to confirm its unanimous approval for the plan of arrangement to Kinbauri's shareholders.
In a separate statement, Kinbauri said its board was not in a position to make any recommendation on Orvana's offer, given the short notice by ATW Gold.
'After considering all alternatives, Kinbauri's board will provide its recommendation to Kinbauri's shareholders regarding the offer,' it said in a statement.
The directors and officers of Kinbauri advise that they have not tendered their shares to the offer, the company said.
On July 14, Kinbauri said it had signed a binding letter agreement with ATW Gold Corp to combine the two companies, at an exchange ratio of 1.35 of ATW share for each Kinbauri share.
However, on July 21, Orvana Minerals Corp raised its rival all-cash offer to buy Kinbauri by 36 percent, at 75 Canadian cents for each Kinbauri share.
Orvana's offer, which valued Kinbauri at C$44.5 million, expires on Friday.
Orvana Chairman Kent Jesperson told Reuters that his company, which operates mines in Bolivia, has been looking to gain a major play in gold and diversify its geographical presence.
'Our revenue and profitability from existing production in Bolivia has been on gradual decline. So, we have needed to look hard for a way for that,' he said.
Jesperson said the company expects to own at least two-third of Kinbauri shares and had entered into lock-up agreements for about 24 percent of the company's shares.
In June, Kinbauri had urged shareholders to reject Orvana's bid, saying the offer failed to reflect the true value of Kinbauri and its flagship El Valle project -- which had been assigned a net present value of C$237 million by a scoping study.
Shares of Kinbauri closed 73 Canadian cents on Friday, while those of ATW closed at 64 Canadian cents on the Toronto Venture Exchange. Orvana shares closed at 76 Canadian cents on the Toronto Stock Exchange.
(Editing by Unnikrishnan Nair) Keywords: ATWGOLD/ (ashutosh.joshi@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: ashutosh.joshi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BANGALORE, July 31 (Reuters) - Canada's ATW Gold Corp on Friday terminated its agreement to acquire Kinbauri Gold Corp, after Kinbauri's board failed to confirm the deal and Orvana Minerals raised its rival all-cash bid for the company.
ATW, which offered a all-stock deal valued at C$49.6 million to acquire Kinbauri Gold earlier this month, said it was terminating the deal after Kinbauri failed to confirm its unanimous approval for the plan of arrangement to Kinbauri's shareholders.
In a separate statement, Kinbauri said its board was not in a position to make any recommendation on Orvana's offer, given the short notice by ATW Gold.
'After considering all alternatives, Kinbauri's board will provide its recommendation to Kinbauri's shareholders regarding the offer,' it said in a statement.
The directors and officers of Kinbauri advise that they have not tendered their shares to the offer, the company said.
On July 14, Kinbauri said it had signed a binding letter agreement with ATW Gold Corp to combine the two companies, at an exchange ratio of 1.35 of ATW share for each Kinbauri share.
However, on July 21, Orvana Minerals Corp raised its rival all-cash offer to buy Kinbauri by 36 percent, at 75 Canadian cents for each Kinbauri share.
Orvana's offer, which valued Kinbauri at C$44.5 million, expires on Friday.
Orvana Chairman Kent Jesperson told Reuters that his company, which operates mines in Bolivia, has been looking to gain a major play in gold and diversify its geographical presence.
'Our revenue and profitability from existing production in Bolivia has been on gradual decline. So, we have needed to look hard for a way for that,' he said.
Jesperson said the company expects to own at least two-third of Kinbauri shares and had entered into lock-up agreements for about 24 percent of the company's shares.
In June, Kinbauri had urged shareholders to reject Orvana's bid, saying the offer failed to reflect the true value of Kinbauri and its flagship El Valle project -- which had been assigned a net present value of C$237 million by a scoping study.
Shares of Kinbauri closed 73 Canadian cents on Friday, while those of ATW closed at 64 Canadian cents on the Toronto Venture Exchange. Orvana shares closed at 76 Canadian cents on the Toronto Stock Exchange.
(Editing by Unnikrishnan Nair) Keywords: ATWGOLD/ (ashutosh.joshi@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: ashutosh.joshi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.