European Goldfields and Eldorado tie-up: At last investors can cheer news about Greece
Both European Goldfields (AIM: EGU) (TSX: EGU) and Eldorado Gold (TSX: ELD, NYSE: EGO, ASX: EAU) advanced more than 6% on Tuesday after announcing their respective shareholders overwhelmingly supported the merger of the two companies first mooted in December.
On solid volumes European Goldfields added 73c or 6.4% at $12.12 in afternoon trade on Tuesday while Eldorado gained 81c to $14.29 or 6%. Vancouver-based Eldorado is worth $7.8 billion in Toronto while European Goldfields has a market cap of $2.2 billion.
European Goldfields has gold reserves across Europe and a producing 95%-owned lead/zinc/silver mine in North-Eastern Greece.
Eldorado is a gold producing, exploration and development company active in Turkey, China, Brazil and Greece.
The companies said in a joint statement that 97.85% of European Goldfields’ shares voted at the shareholders’ meeting held on February 21 voted in favour of the special resolution. 96.04% of the Eldorado shares voted at its meeting approved the issuance of up to 167,189,798 of Eldorado’s common shares in connection with the deal.
European Goldfields shareholders were offered 0.85 of an Eldorado share and a tiny sliver in cash for each share tendered in the $2.5 billion deal that will see Eldorado shareholders own just under 80% of the combined company.
“The overwhelmingly positive approval of the merger with Eldorado resoundingly affirms the merits of the transaction, and underscores the potential of the combined group as the leading growth oriented intermediate gold producer,” Martyn Konig, Executive Chairman and President of European Goldfields, said in a statement.
“We are pleased with the shareholder support for this transaction enhancing Eldorado’s position as the dominant low cost, high growth, gold producer in the region,” said Paul Wright, President and CEO of Eldorado Gold. “We look forward to further developing our business interests, taking full advantage of the excellent operating teams and working relationships established by European Goldfields in both Greece and Romania.”