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Nordgold (NORD) NV, Russian billionaire Alexey Mordashov’s gold producer, expects to consolidate 100 percent of its High River Gold Mines Ltd. (HRG) unit as early as the first quarter, Chief Executive Office Nikolai Zelenski said.
“Based on the number of High River shares taken up under the offer to date, Nordgold believes it will have sufficient votes to approve a subsequent acquisition transaction,” Zelenski said today in a phone interview. Nordgold is seeking the 25 percent it doesn’t already control.
The majority of High River investors “effectively already approved” the consolidation plan when they accepted Nordgold’s offer for shares, according to Zelenski.
A total of 51.6 percent of the minority shareholders opted for an Oct. 19 offer for either 0.285 of a Nordgold global depositary receipt or C$1.40 ($1.42) in cash for each High River share, Nordgold said today in a statement. Nordgold’s free float will rise to 14.2 percent from 11 percent as a result, data from the company’s press service show.
An extension of the offer to Dec. 8 gives the remaining High River minorities “an opportunity to participate in the transaction, and to quickly receive their consideration in either cash or GDRs,” Zelenski said. It will take more time for investors that hold onto their shares after Dec. 8 to receive payment, he said.
Nordgold has to pay about $60 million to High River investors that have chosen the cash offer. Should all the remaining shareholders prefer cash, Nordgold will spend about $200 million on the whole transaction, according to Zelenski.
Nordgold GDRs rose 1 percent to $4.90 by the close in London, the highest since Oct. 22. The 5,000 shares that traded were 23 percent of the three-month daily average.
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