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Gold industry

American Barrick Offers $1.4 Billion for Lac Minerals Amid Hostile Takeover Bid from Royal Oak

Strategic Insights

— 1 min read

Lac Minerals Ltd. is at the center of a contentious battle for control, with the American Barrick Resources Corporation offering $1.4 billion to acquire the company. This offer pits one of the world's largest gold producers against upstart Royal Oak Mines Inc., which is trying to take over Lac Minerals through a hostile takeover bid. The bids from both companies include a combination of cash and stock, with Lac Minerals' chairman, James Pitblado, dismissing both offers as inadequate. The outcome of this bidding war will have significant implications for the future of Lac Minerals and its operations in Canada, the United States, and South America.

Key Takeaways:

  • American Barrick has offered $1.4 billion to acquire Lac Minerals Ltd., a Canadian gold mining company.
  • The bid by American Barrick pits the world's eighth-largest gold producer against upstart Royal Oak Mines Inc.
  • Lac Minerals' chairman, James Pitblado, has dismissed both offers as inadequate.
  • The offer by American Barrick includes a mixture of cash and stock, with a valuation of $13.69 (Canadian) per share.
  • Royal Oak's chief executive, Margaret Witte, believes that her company's offer has significant potential value, and that shareholders should take shares of Royal Oak.
  • Analysts believe that Lac shareholders are likely to favor American Barrick, which produced more than five times as much gold as Royal Oak in 1993.
  • Some investors are waiting for further bids, with Royal Bank Investment Management owning approximately three million shares of Lac Minerals.
  • American Barrick's chairman, Peter Munk, has stated that his company has had its eye on Lac for years and finds its operations in South America to be particularly complementary.

Statistics:

  • Lac Minerals has gold reserves of 13.5 million ounces.
  • American Barrick produced 1.6 million ounces of gold last year, making it the world's eighth-largest producer.
  • Royal Oak produced approximately 276,000 ounces of gold in 1993 and expects to rise to 375,000 ounces this year.

Sources:

  • The American Barrick Resources Corporation press release (no date)
  • The Globe and Mail (no date)
  • Gold Fields Mineral Services Ltd. (no date)
  • Royal Bank Investment Management (no date)
  • Lac Minerals Ltd. (no date)

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