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The Globe and Mail

Ventana caves, accepts slightly higher AUX bid

For all its posturing, Ventana Gold Corp. was only able to secure a 3 per cent higher bid from AUX. The two firms have reached a verbal agreement that will pay $13.06 per Ventana share.

A few weeks back, Ventana tried to make it seem like it would never accept such a low offer. That's understandable. Any company that receives an unsolicited hostile takeover bid touts its reserves and the supposed value it has in the ground.

Just before Christmas Ventana chief executive officer Stephen Orr claimed the original offer's 26 per cent premium was "simply inadequate" and cited two recent Canadian gold deals as proof. Kinross Gold Corp. paid 1.7 times the net asset value of Red Back Mining Inc.'s African assets and Goldcorp Inc. paid 2.2 times the value of Andean Resources Ltd.'s Argentine assets,

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But in the end, the slightly higher offer Ventana's board accepted is still worth about 1.1 times the gold miner's net asset value. Why? Because no other bidder emerged. And that's after Ventana hired Goldman Sachs and TD Securities to engage other suitors.

If shareholders approve the deal, Brazilian billionaire Eike Batista will own the company through AUX, one of his subsidiaries. Ventana is currently developing the La Bodega gold project in Colombia, right next to Greystar Resources operations.

Mr. Batista's first offer was worth $12.63 per share. and was made back in November. That bid was set to expire tomorrow and has now been extended.

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