Kinross Gold Corporation (KGC, K.TO) announced Monday that they will aquire Bema Gold Corportation (BGO) for an all-stock $3.1 billion deal. Following this announcement Kinross stock was seen trading down 8.07% to 13.78 while Bema stock was up 11.11% to 6.00. Upon completition of the deal 61% of Kinross will be held by exisiting shareholders while the remaining 39% will be held by Bema shareholders. The deal was unanimously approved by both companies board of directors. The deal is still subject to all regulatory approvals, and a vote by Bema shareholders in mid-January before it will become official.
2 thoughts on “Kinross Down – Bema Up after Acquisition News”
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Why the big drop though.. above the deal the day before had strong earnings..
I believe when Kinross made the deal for Bema they actually over inflated Bema’s share prices by 34% compared to their running 20-day average. This deal basically gave more money to the Bema shareholders than the actual value that those shares possessed. Since the stocks dropped today, and the deal was made completely in stock, the deal is actually worth less now. Since the stocked dropped to about $13.70 that basically means they are offering $6.04 for each Bema share. With Bema rising to $5.97 the deal is actually a lot closer now than it was before the day.