Kirkland wins shareholder backing for $3.3bn Detour takeover
Canadian miner Kirkland Lake Gold Ltd’s takeover offer of C$4.4 billion ($3.35 billion) for rival Detour Gold Corp won shareholders’ support at both companies on Tuesday, a person familiar with the votings said.
Toronto-listed Kirkland won the backing of about 99% of its shareholders, and almost 86% of Detour’s at separate meetings held on Tuesday. The vote counts are subject to final confirmation, and the companies will release a press release shortly, the person said.
The deal would give Kirkland heft and may help ease concerns about the short mine life at the company’s flagship underground Fosterville operations in Australia.
Kirkland in November offered 0.4343 shares for each Detour Gold share in a bid that garnered support from influential proxy advisors Glass Lewis & Co and Institutional Shareholder Services Inc.
Kirkland had touted Detour’s annual production around 600,000 ounces and said the combination would generate annual pre-tax savings of up to $100 million.
Kirkland’s investors had, however, balked at the high premium it offered, about 24% at the time of the offer announcement, sending shares down sharply. The lower share price then prompted calls from some Detour investors for a cash sweetener.
Led by top producers Newmont Corp and Barrick Gold Corp, the gold sector has seen a flurry of consolidation as miners scramble to replace dwindling reserves and appease cost-conscious investors.
Detour’s sale comes more than two years after billionaire hedge fund manager John Paulson waged a successful – and at times bitter – campaign to oust the bulk of the Canadian miner’s board.
Kirkland’s shares were down 2.4% in afternoon trading in Toronto, while Detour fell about 2% amid broader weakness in gold-facing stocks.
($1 = 1.3142 Canadian dollars)
(By Jeff Lewis and Shariq Khan; Editing by Arun Koyyur and Shinjini Ganguli)