This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Aurizon Recommends “No” To $780-million Takeover Offer

A takeover of Aurizon Mines (TSX:ARZ,AMEX:AZK) by Alamos Gold (TSX:AGI) looks as good as dead, according to statements this week from the Quebec-focused gold producer. 

Earlier this month, Alamos, which operates the Mulatos mine in Mexico, made an unsolicited offer of $4.65 per share for Aurizon, which owns the Casa Berardi and Joanna mines in the Canadian province of Quebec. The C$780-million offer would have boosted Alamos' gold production by 65 percent, to about 300,000 ounces, but Aurizon saw the offer as a lowball.

“This is a financially inadequate and opportunistic offer … It fails to compensate Aurizon shareholders for the true value of our assets,” stated George Brack, chair of a committee formed by Aurizon to examine the deal, in a statement released Wednesday.

Aurizon maintains that the offer represents a 21-percent discount to its 52-week high of $5.75, and is 4.1 percent less than its January 22 closing price; it should therefore be rejected. The stock shot up 33 percent when the offer was first announced on January 14.

Mining and exploration commentator Rick Mills has pointed out that Aurizon signed an option and joint venture (JV) agreement with Niogold Mining (TSXV:NOX) in 2010 that would be attractive to Alamos. The JV gives Aurizon the right to earn a 50-percent interest in Niogold's Marban Block property by spending $20 million on exploration and then making a resource payment for half of the property's estimated gold ounces.

Mills said before this week's announcement that Alamos will “like the Marban Block deal and decide to continue Aurizon's option if they are successful in their bid.” And if they are unsuccessful, which looks the more likely scenario, Mills predicts another offer could be forthcoming: “… the door is open for Niogold's neighbor, Osisko (TSX:OSK), or somebody else, to step in.”

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs