The Globe and Mail reports in its Friday, Dec. 6, edition that two of Kirkland Lake Gold's biggest shareholders have weighed in on its $4.9-billion bid for Detour Gold, with one in favour and the other expressing reservations.
The Globe's Niall McGee writes that Eric Sprott, one of Kirkland's top three shareholders, said he intends to vote for the all-stock acquisition.
Initially undecided, Mr. Sprott, who owns more than 13 million shares in Kirkland, said he came around after studying up on Detour and reflecting on Kirkland's plans to boost performance at the struggling low-grade miner.
Kirkland says it can materially increase Detour's production over the next few years, and slash its costs.
"I think it would be a pretty good cash-generating machine," Mr. Sprott said of Detour.
Other top shareholders are not as enthused. Joe Foster, manager with VanEck, said while the big picture strategy behind the combination makes sense, he was "extremely disappointed" with the structure of the deal. The Toronto-based miner is offering 0.43 Kirkland share for each Detourvshare at a 24-per-cent premium, and no cash.
He said, "Premium all-stock deals usually result in substantial declines in the acquirers' share price."
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