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Mining industry

Homestake Mining Company to Acquire Remaining Shares of Australian Subsidiary

Strategic Insights

— 1 min read

Homestake Mining Company has announced plans to acquire the remaining shares of its Australian subsidiary, Homestake Gold of Australia Limited (HGAL), through a formal takeover offer. The company intends to exchange its common stock for the shares, with HGAL shareholders having the option to receive cash instead. This move aims to simplify Homestake's corporate structure, eliminate costs associated with maintaining a small public company, and acquire additional gold reserves at a fair price. The transaction is valued at approximately $162 million, based on current exchange rates and share prices.

Key Takeaways:

  • Homestake Mining Company will make a formal takeover offer within the next 60 days to acquire the remaining shares of its Australian subsidiary, Homestake Gold of Australia Limited (HGAL).
  • The company will exchange 9,755,000 shares of its common stock for the 109,605,000 shares of HGAL that it does not already own.
  • HGAL shareholders will have the option to receive $1.90 per share Australian in cash instead of the equivalent in Homestake Mining shares.
  • The transaction is valued at approximately $162 million, based on current exchange rates and share prices.
  • The deal aims to simplify Homestake's corporate structure, eliminate costs, and acquire additional gold reserves at a fair price.
  • Homestake Mining Company has major gold operations in the United States, Canada, and Australia.
  • The company's 1995 gold production is estimated to be about 1.9 million ounces.

Statistics:

  • 9,755,000 shares of Homestake Mining's common stock will be exchanged for HGAL shares.
  • The transaction is valued at approximately $162 million.
  • HGAL shareholders have the option to receive $1.90 per share Australian in cash instead of equivalent Homestake Mining shares at $2.00 per share Australian.
  • The proposed share exchange suggests a market value of approximately $162 million.
  • Homestake Mining's 1995 gold production is estimated to be about 1.9 million ounces.

Sources:

  • Business Wire - August 14, 1995
  • NYSE:HM - Homestake Mining Company press release
  • Homestake Mining Company contact: Gene G. Elam, Vice President, Finance and Chief Financial Officer, 415/981-8150

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