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AuRico Gold Inc. Message Board

  • bluepillnow bluepillnow Sep 14, 2011 5:01 PM Flag

    Why would you own AUQ instead of NXG?

    NXG is trading at a 7% discount to the buyout ratio. If you want to own AUQ why wouldn't you buy NXG instead? The only way the merger doesn't go through is if NXG gets a better offer in the next few weeks.

    If that happens you will make even more money by owning NXG instead of AUQ.

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    • NXG discount is back to 7% again. Another great opportunity to buy NXG. Merger is only about 5 weeks away.

    • Well it's back to 5% now. Still too high and will continue to decline towards zero.

    • "The only way the merger doesn't go through is if NXG gets a better offer..."

      WRONG!

      the merger will NOT happen unless AUQ S/h would be stupid 'nuf to approve it.

      Keep in mind Mr Market thinks the whole deal is so BAD that has ALREADY shaved off ~40% off the AUQ pre-announcement value

      • 4 Replies to oldeduc8you
      • <Keep in mind Mr Market thinks the whole deal is so BAD that has ALREADY shaved off ~40% off the AUQ pre-announcement value>

        No, I think Mr. Market is taking full advantage of the S&P TSX small cap fund being forced to liquidate their AUQ holdings, which just happens to be their 5th largest holding. Somehow you knew this, and I guess I should have too but I failed to check the various institutional holders of AUQ to see if any of them were likely to be selling anytime soon. My bad!

        Anyway, AUQ has exceeded the C$1.5B maximum allowable market capitalization constraint of the TSX small cap fund and so they are selling. I doubt the drop in AUQ has much to do with anything else.

        So far, two different suitors have approached NXG with an interest in either merging or acquiring. That should tell us that NXG is very desirable at current prices. You have been telling us for years that they are worthless, but the people who let their money do their talking seem to think otherwise.

        I'm buying NXG on the dips, having bought some a $4.06/share and more at $3.93/share. Technicals suggest it could drop to $3.60/share, so I have additional cash on the sidelines. I doubt it's going to drop that low, but who knows. Ultimately, I expect it to return to at least $4/share before finally being acquired by someone.

      • Your knowledge of the merger likelihood seems to match your math skills...

        Show me one reference to an AUQ institutional shareholder who is opposing the buyout. You can't because you are talking out of your you know what...

      • Since math was obviously not your strong subject in school let's break this down. AUQ 52 week high is $14.17 meaning that a 40% decline from that price would mean about a drop of $5.67 or around $8.50 pps. Maybe i'm the slow one but even after miserable trading the last few days the stock is still $11.16. Which tells me that you're either really clueless or more than likely a fear mongering shortie. Either way your facts are WRONG!!

    • Blue, actually my thread " Warcamp, please educate (and guide) us" can be found right here right now at the top of the list, depending upon when you happen to read this.

      So just read Warmcamp´s (and others) valuable inputs and then you´ll see the complexity of merger´s market pricings.

      Cordially

    • Bluepillow, you are 50% correct, but :

      If the AUQ - NXG deal does not fly, AUQ would most probably return to its original value before the NXG merger announcement, probably with a 10 to 15% price increase.
      AUQ would thus be back to square one, but would continue to be a most important PM miner on its own standing, ready, willing and able to do business with someone else.

      On the other hand, in that case NXG would once again try to succeed with this "new" offer, after having failed with PPP (with a $ 25 million direct loss) and now with AUQ.
      NXG price, depending upon the quality and terms of this "new" offer might go up, yes, or down because because...

      So, like in couples, marriage is beautiful but it ain´t that simple, is it ?

      Blue, imho, the board member that would be best fit to answer your question is Warmcamp.

      As a matter of fact, on this same AUQ board I started a thread not that long ago (two weeks maybe ?) entitled " Warmcamp, please educate (and guide) us ". If you read Warmcamp´s replies, all your doubts would disappear and new ones (deeper) ones would arise.

      Good trades Blue !

      • 1 Reply to georgiewelchade
      • The premium is just too large right now for a deal that will be consummated in just 6 weeks. I don't think it is at all possible that NXG would go down if they get a competing offer.

        The only way you lose by owning NXG instead of AUQ is if for some reason AUQ shareholders vote down the deal. I highly doubt that will happen as management surely has the votes on this and there haven't been any institutional shareholders complaining about the deal.

        7% discount is absolutely huge for a deal this close to closing.

 
AUQ
2.96-0.05(-1.66%)Mar 27 4:03 PMEDT