A refiner pours bars of gold at Agnico-Eagle's Meadowbank Mine facility in Meadowbank Mine, Nunavut on Wednesday, August 24, 2011.Sean Kilpatrick/The Canadian Press
Agnico-Eagle Mines Ltd. doubled the cash portion of its stock-and-cash takeover offer for Grayd Resource Corp. Thursday to partially make up for a sharp drop in the gold miner's stock price.
Shares in Agnico-Eagle fell Wednesday to their lowest level since 2007 after the company stopped operations at its Goldex mine in Quebec due to flooding.
Under a friendly takeover deal announced last month, Grayd shareholders can opt for cash or shares with the cash portion capped at $92-million.
The two companies announced Thursday that the cap for the cash portion has been raised to $183-million. The equity portion remains capped at 2.7 million shares.
The total value of the deal was about $275-million when it was announced. Based on the announcement Thursday and Agnico-Eagle's share price, the revised deal was worth about $230-million.
"The board of directors of Grayd, upon the unanimous recommendation of its Special Committee, has unanimously reconfirmed its recommendation that Grayd shareholders tender their shares to the offer," the companies said in a joint statement.
Under the offer, Grayd shareholders may chose either $2.80 in cash or 0.04039 of an Agnico-Eagle share and five cents in cash, in each case subject to pro ration.
If all Grayd shareholders opt for the cash option, they would each get $1.87 cash and 0.01371 of an Agnico-Eagle share for their shares. Based Agnico's stock price Thursday, the offer would be worth the equivalent of about $2.51 per Grayd share
Agnico-Eagle shares were down 75 cents at $46.60 on the Toronto Stock Exchange.
Grayd shares, which had fallen eight per cent on Wednesday, were up nine per cent or 21 cents in Thursday trading at $2.51 on the TSX Venture Exchange.