NEW YORK (AP) -- Aurizon Mines Ltd. said Wednesday it is recommending that shareholders reject a buyout offer from Alamos Gold Inc., a rival Canadian gold producer.
Aurizon said its board unanimously voted against the offer. It said Alamos' bid undervalues the company and suggested Alamos was trying to capitalize on a decline in the value of Aurizon shares.
"This is a financially inadequate and opportunistic offer, timed to take advantage of a transition year for Aurizon that we believe will be the foundation of long-term value creation for our shareholders," said board member George Brack. Brack led the committee that reviewed Alamos' offer. He said Aurizon is looking at other options and could discuss "alternative transactions" with other companies.
Alamos said on Jan. 14 that it had increased its stake in Aurizon to 16 percent from about 2 percent, and it offered to buy the company for 780 million Canadian dollars ($792 million) in cash and stock. U.S. shares of Aurizon had lost about 34 percent of their value over the previous year, falling to $3.46 from $5.27. In late December the stock reached a four-year low of $3.19.
Aurizon shares have risen 37 percent since then. It was down a penny to $4.74 in afternoon trading.