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Summary
- Agnico Eagle set to buy TMAC for C$ 2.20 per stock, compared to Shandong’s C$ 1.75 per unit deal.
- TMAC’s majority stockholders,Shandong and Newmont Corp have also provided their backing to this acquisition.
- Stocks of both material companies opened in the green, guided by this deal.
- The federal government had halted TMAC’s planned sale to China’s Shandong Gold Mining on national security grounds.
Gold company Agnico Eagle Mines Ltd. (TSX:AEM) Tuesday announced that is it acquiring Nunavut-based TMAC Resources (TSX:TMR) for C$286.6 million. The development comes days after federal government halted TMAC’s planned sale to China’s Shandong Gold Mining on national security grounds.
According to the deal announced on January 5, Agnico will purchase TMAC for C$ 2.20 per unit, against Shandong’s C$ 1.75 per unit deal. Agnico is offering a premium of nearly 66 per cent to TMAC's 20-day average price noted on January 4. This agreement would not require any stockholders meeting as TMAC’s investors already voted for the takeover.
TMAC’s stakeholders possessing 62.3 per cent of its outstanding units. Shandong and Newmont Corp. have also been cooperating to conclude the transaction, Agnico said in a release.
Let us now glance at the stock performances of Agnico and TMAC:
@Kalkine Image 2020
TMAC Resources Inc. (TSX:TMR)
Current Stock Price: C$ 1.57
On the back of the development, the stock jumped over 3 per cent at the early trading hours on Tuesday. Units of the material company have soared nearly 23 per cent in the last one month. However, the stock has declined over 57 per cent year-to-date (YTD).
In the third quarter of 2020, the company recorded total debt of C$ 169.7 million. Its gross revenue was C$ 70.5 million in Q3 2020 against C$ 72.8 million in Q3 2020.
The gold explorer company has a current market cap of C$ 204.5 million. It holds total listed outstanding shares of over 130 million. Its stock has a present price-to-cashflow of 3.60 and a debt-to-equity ratio of 0.49 as per TMX data.
Agnico Eagle Mines Ltd. (TSX:AEM)
Current Stock Price: C$ 96.21
The gold miner’s stock popped up over 7 per cent, led by the acquisition news. Units of the company have increased by over 23 per cent YTD. Consequently, the company made it to TMX’s top metal and top price performer companies.
The stock delivers a positive return on equity of 12.46 per cent and a return on assets of 7.31 per cent. Its present earnings per share stand at C$ 3.50. It has a price-to-cashflow ratio of 16.20 and a price-to-book ratio of 3.335, according to TMX data.
The yellow metal miner distributes a quarterly cash dividend of US$ 0.35 per common share, with a current dividend yield of 1.919. Its 3-year dividend growth is 26.54 per cent.
Its current market cap is approximately C$ 23.38 billion.
