- Gold and silver producer Fresnillo PLC said Monday that it will make a bid for the remaining stake of MAG Silver Corp. that it does not already own in a deal that values the company at about $223-million (U.S.).
The company, which already controls a 19.8 per cent stake in MAG Silver, said after the close of markets that its Fresbal Investments Ltd. subsidiary will pay $4.54 per share in cash.
MAG Silver shares closed down 73 cents at $4.02 on the American Stock Exchange. The shares also trade on the Toronto Stock Exchange.
Fresnillo is the company's joint venture partner and operator of MAG's core asset, a 44 per cent stake of the Minera Juanicipio Joint Venture in Mexico.
MAG Silver, which is based in Vancouver, formed a special committee of its board in October to look at strategic alternatives for the company following Fresnillo's acquisition of its stake in the company.
"We have obviously struck a special committee to deal with the possibility of this eventuality taking place and now that it has, we will follow a process that has been set down by the committee," said MAG Silver chief financial officer Frank Hallam, who added the company planned to issue a statement Tuesday.
In a letter to MAG Silver president and chief executive officer Dan MacInnis on Monday, Fresnillo said it would be in the best interests of MAG Silver shareholders for the company to complete its valuation as soon as possible.
"Fresbal intends to mail its formal takeover bid circular to MAG shareholders as soon as practicable upon receipt of the completed valuation," Fresnillo chief executive Jaime Lomelin wrote.