Yamana increases offer price for Meridian Gold, extends tender offer

By Lisa Kerner

Charlotte, N.C., Sept. 20 - Yamana Gold Inc. increased the cash component of its offer for Meridian Gold Inc. by 63% to C$6.50 per share from C$4.00 per share. The share component is unchanged, giving Meridian shareholders 2.235 Yamana common shares in addition to the C$6.50 cash for each Meridian common share tendered and accepted.

It addition, Yamana reduced the minimum tender condition in its acquisition of Meridian to 50.1% and extended the offer deadline to 8 p.m. ET on Oct. 2.

The offer was previously contingent on 66 2/3% of the common shares begin tendered by 8 p.m. ET on Sept. 24.

Yamana cited current market conditions, the "operational upside" to Meridian's assets and updated fairness opinions from Genuity Capital Markets and Canaccord Capital Corp. as reasons for the increase.

"Based on our assumptions and the value we see in Meridian's assets, we are offering a full and fair premium to Meridian shareholders," Yamana chairman and chief executive officer Peter Marrone said in a company news release.

"Our revised offer follows discussions with our shareholders and Meridian shareholders and we believe the offer addresses the issues raised by Meridian. As we have said from the beginning, the transaction creates a substantive company that is greater than the sum of its parts."

About 24.4 million, or 24%, of Meridian's common shares had been tendered as of Sept. 19.

On July 20, Meridian's board of directors said it would consider the original unsolicited tender offer by Yamana to acquire the company for 2.235 Yamana common shares plus C$3.15 in cash for each common share of Meridian.

Meridian is a mid-tier gold producer with mining operations in Chile and Nevada. The company is based in Reno, Nev.

Yamana is a Toronto-based precious metals mining company.

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