As an NXG shareholder, there are some things about this deal that I *really* dislike - but there's no denying the boon it's already been to the stock's price. And the combined company seems to have gone a long way toward eliminating Northgate's biggest negative: Its lousy management.
A certain article by Motley Fool may have had a positive impact on the stock as well. I'll post it in a few.
I'll explain my concerns and decide what I want to do with my largest holding in a little bit.. perhaps tomorrow, depending partly on what gold does. Meanwhile, I'm not sure. I'm still researching this "deal"...
Northgate and Primero to Combine and Create A Leading Mid-Tier Gold Producer
Press Release Source: Northgate Minerals Corporation On Wednesday July 13, 2011, 7:00 am EDT
Business Combination for Superior Value Creation
VANCOUVER, July 13, 2011 /PRNewswire/ - (All figures in Canadian dollars, unless otherwise noted) Northgate Minerals Corporation ("Northgate") (TSX:NGX.to - News) (NYSE Amex: NXG) and Primero Mining Corp. ("Primero") (TSX: P.to - News) are pleased to announce today that they have entered into a definitive arrangement agreement (the "Arrangement Agreement") to combine their respective businesses and create a new, leading mid-tier gold producer with significant value creation opportunities. The combined company will benefit from the current production and expansion potential at the San Dimas mine in Mexico and the Fosterville and Stawell gold mines in Australia, together with the long-life Young-Davidson gold development project in Ontario. The new company will be led by Joe Conway, current President and Chief Executive Officer of Primero. The transaction will create a company with an expected combined market capitalization of approximately $1.2 billion.
Under the terms of the Arrangement Agreement, Northgate will acquire all of the issued and outstanding common shares of Primero for 1.50 Northgate common shares per Primero Share (the "Exchange Ratio"). Each outstanding option of Primero shall be exchanged for options of Northgate that will entitle the holder to receive, upon the exercise thereof, Northgate shares based upon the Exchange Ratio and otherwise on the same terms and conditions as in the original option. Each outstanding warrant of Primero will entitle the holder to receive, upon the exercise thereof, Northgate shares and otherwise on the same terms and conditions as in the original warrant. Northgate's offer represents:
•A value of $4.215 for each Primero common share based on the July 12, 2011 closing price of Northgate common shares ($2.81) on the Toronto Stock Exchange
•A premium of approximately 13.9% to Primero's closing price on July 12, 2011 and a premium of approximately 20.5% and 11.7% calculated on the 10-day and 20-day volume weighted average price (VWAP) of each respective company on the Toronto Stock Exchange
The full article, including the transaction's highlights: http://finance.yahoo.com/news/Northgate-and-Primero-to-prnews-3448291284.html?x=0&.v=18
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