Aurizon’s Board Unanimously Recommends Rejecting Alamos Offer

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By jturbin | January 24, 2013 4:04 AM EST

Gold Alert

Aurizon Mines (ARZ.TSX, AMEX: AZK) reported that its Board of Directors has unanimously recommended that shareholders reject the hostile take-over bid received from Alamos Gold.  On January 14, 2013, Alamos announced an unsolicited offer to acquire all of the outstanding common shares of Aurizon Mines for approximately C$780 million.

Aurizon noted that the Alamos offer, based on the closing price of Alamos on January 22, 2013, represented a value of C$4.55 per Share assuming full pro-ration of the Alamos Offer consideration; this is a 4.1% discount to the closing price of Aurizon’s shares on the same day and a 21% discount to the 52-week high share price of Aurizon.  The Company also pointed out that the C$4.65 price has never been available to Aurizon shareholders, based on the implied offer value, since the Alamos offer announcement was made. Based on the current Alamos offer value of C$4.55 per share, the effective premium to Aurizon shareholders has eroded 4% relative to the closing price of the Aurizon Shares on January 11, 2013 – the last trading day prior to the Alamos offer announcement.

Highlights:

* The Board’s recommendation is based in part on the recommendation of the Special Committee and the advice from financial advisors to Aurizon and the Special Committee and follows a thorough review process, undertaken in consultation with its financial and legal advisors

* The Board noted that it has serious concerns about unequal treatment of Aurizon shareholders as a result of Alamos having entered into private share purchase agreements with certain shareholders of Aurizon immediately prior to the commencement of the Alamos Offer

* The Board intends to seek shareholder ratification of a shareholder rights plan at a special meeting of shareholders on March 7, 2013 in order to provide the Board with adequate time and measures to respond to unsolicited takeover bids

George Brack, Chair of the Special Committee of the Aurizon Board of Directors:

“This is a financially inadequate and opportunistic offer, timed to take advantage of a transition year for Aurizon that we believe will be the foundation of long-term value creation for our shareholders. It fails to compensate Aurizon shareholders for the true value of our assets. We also believe there is increased geopolitical and development risk associated with Alamos shares.”

Aurizon Board of Directors:

“The Board and Special Committee are focused on exploring the full range of value-maximizing alternatives for the Company. These include building on existing initiatives and engaging in discussions with third parties regarding potential alternative transactions that create superior shareholder value.”

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This article is contributed by Gold Alert and does not represent the views or opinions of International Business Times.

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