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AuRico Gold Inc. Ordinary Share Message Board

  • cedarwoodco cedarwoodco Dec 25, 2012 2:41 PM Flag

    Tender Offer

    Is this buy-back good for shareholders or not?
    Why isn't stock now trading for $8.30 or more?

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    • There is no direct reason for the shares to trade at exactly 8.30 or above but there is motivation for it trade higher because of the buyback if it trades below 8,30 than more than 30 million shares will be tendered and you will get a pro rataa amount of shares purchased. Do to this pro rata issue there is not a certain arbitrage scenario (like a buyout of ALL the shares) of buying shares and tendering them at 8.30 driving the price up to 8.30. The best you get is to buy shares, tender a portion at 8.30 and then sell the remianing at market (or hold onto them). The net result is purchase price refund on a portion of your shares. You just don't know if that portion is 50% or 75% or 20%.

    • There was an expectation of a special dividend that didn't pan out. Some people have massive profits on their positions (I assume that many of the firms that reported new positions at the end of September entered after aurico slashed production estimates). From that point (5.25) the buyback is happening nearly 60% higher than that price, and it's clear that the traders win again at the expense of long term holders.

      Dividends are good because at least everyone benefits proportionally.

    • I am probably missing something but I don't see any reason to sell now when the company has openly put a floor under the stock at $8.30. I am buying at current levels, we will see if I am smart or stupid.

      Sentiment: Buy

      • 2 Replies to iwynne2002
      • If you read the prospective we all received this week regarding the offer to purchase your shares it says loud and clear: Aurico Management believes the share buyback is in the best interests of the company and shareholders. Now if you sell your shares in the offer you will no longer be a shareholder correct? So why would you want to be left out of a group that Aurico Management feels will strongly benefit? CLEARLY Aurico is going to conduct a special dividend with the near $350M they will have left AFTER completion of the tender offer. Why would Aurico want to get 32 - 36 million shares off the street? Because they see significant upside in owning those shares. Hold on tight to your shares, 2013 Aurico will be up sharply.

        Sentiment: Strong Buy

      • Nobody is going to get 8.30 unless they are an insider.

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