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View Full Version : Kinross Buys Red Back Mining



Canudigit
08-02-2010, 10:18 PM
Kinross buys Red Back Mining tonite, the day before Red Back announces its earnings, the day of the Canadian civic holiday.
What do you Red Back holders think, and how about the K holders too?

canadianglow
08-03-2010, 12:15 AM
I'm a longtime Kinross Holder.

The company has made some wise decisions in my mind. Selling their share of Harry Winston was a good way to raise some capital. I'm not sure about the 7 billion dollar valuation - but I've been on some forums and the Red Back guys seem to think they got ripped off (so I guess this is a good thing for K). The only thing I'd like to see Kinross start to focus on would be some assets in safer zones. Their biggest mine is in Russia, and West Africa isn't exactly known for their accomadating business friendly regimes....

Anyone else care to comment on the valuation of the merger?

fl57caveman
08-03-2010, 06:13 AM
don't hold either one, but i have been watching RBI, it is up 603% since i laid an eye on them. and that is not long. they are redhot. good move by kinross

Canudigit
08-03-2010, 07:02 AM
I bought a large chunk of RBI less than nine months ago for $15.31 and I guess it's good it's about doubled (price in K shares and warrants = 30.50 CDN). At time of purchase I looked at Kinross, but wasn't as impressed. Bruce7 mentioned he thought RBI would be 40, guess that point is moot now. I think K is a canny company. I guess you're not supposed to fall in love with your stock, but it will be a tough good-bye for me.

Canudigit
08-03-2010, 08:59 AM
My handy-dandy TD Waterhouse site supplied the following deal details:

"The transaction will be carried out by way of a court-approved plan of arrangement and will require the approval of at least 66 2/3 % of the votes cast by the shareholders of Red Back at a special meeting of Red Back shareholders expected to take place in mid-September 2010."

The deal also needs approval of a majority of the votes cast by K holders at a special meeting expected to take place the same day as the Red Back meeting and needs court approvals.

The arrangement provides that boards of directors of each company, Red Back and Kinross, may, under certain circumstances, terminate the agreement in favour of an unsolicited superior proposal.

I wonder if the u.s.p. will materialize.

The astrological chart for RBI is explosive, in a good way, but not until October. I don't have the date of incorporation for K handy, if at all, so I don't know what their prospects are.

Last I looked, K was down 6% and RBI was up 7%.

I don't think this is over.

Canudigit
08-03-2010, 06:51 PM
Sunny Freeman from Canadian Press writes,

"At least one analyst says a rival offer may emerge."

"Given the vast exploration potential of Tasiast alone, we cannot rule out another bidder won't enter the fray as RBI would provide any senior producer with a significant toehold in one of the most prospective greenstone belts in West Africa", said a research note from UBS Securities Canada."

UBS said an unsolicited offer for either Redback or Kinross would scuttle their friendly deal.

I think the price of gold and state of the markets at the mid-September meeting (I have contacted RBI to obtain the exact date for that) will help determine whether this deal goes as planned. I know I'm not voting for it, if it gets that far.
If this deal does get deep-sixed, I can see another one (hopefully a more lucrative one for us shareholders) succeeding by January.

A complete analysis of the viability of this deal, from an astrological viewpoint, would require the time of the Kinross announcement on Aug. 02, which I don't have.

canadianglow
08-03-2010, 08:46 PM
Here's something I never fully understood about M&A - K has already said they'd buy RBI at $30.ish a share, yet the closing price for RBI after today was only 27.45. Assuming the dow theory is correct, and all news is "baked" into the share price, shouldn't we be trading very close or at least at the current price of 30 per share for RBI? Or does this just represent the uncertainty of the deal falling through?

brutus2
08-03-2010, 09:16 PM
you answered your own question.

Canudigit
08-03-2010, 10:12 PM
One factor may be that the vote isn't until mid-Sept. Leaves time to hang back for awhile and see what happens. Other factors are probably at work I have no idea about - never been through this. I guess RBI reported good earnings today though - you have to wonder what the price would have been today without all the K commotion.

canadianglow
08-03-2010, 10:25 PM
One factor may be that the vote isn't until mid-Sept. Leaves time to hang back for awhile and see what happens. Other factors are probably at work I have no idea about - never been through this. I guess RBI reported good earnings today though - you have to wonder what the price would have been today without all the K commotion.

Yeah I guess. I did some reading up on the deal - I like RBI, but man, Kinross will have over a billion shares outstanding if this takes place in its current form. Even Barrick has less than that!

Canudigit
08-25-2010, 08:32 AM
I just voted 'No' on the proposal for Kinross to buy RBI. Shareholders of record on Aug. 11 can vote on the the internet until around the Sept. 15 (10AM EDT) special meeting.
RBI closed at 28.37 yesterday and would be going nowhere but up in the coming months.
My vote might not have counted for much, but I thought it was the right thing to do.

Canudigit
08-27-2010, 03:21 PM
Today the last figure I have said RBI closed at 30.65.
Now, the value of Kinross bid in early Aug, combined with warrants, was about $30.50 per RBI share. So RBI is now trading above what Kinross offered initially. Again, the meeting to vote on the takeover is Sept. 15, 10AM in TO.

Kinross closed at 17.36 today. The proposed deal will give 1.778 Kinross shares for each RBI share, which at K's price today would equal about $30.86, not counting the Kinross warrants RBI holders also receive in the deal (they get .11 warrant for each share of RBI.)

Strange trading in RBI near the very end of the day. It was up .56 then all of a sudden it was up .74. In fact, watching the end of day price action of RBI and some of the other PM stocks I own, it sure seemed like panic buying going on.

Canudigit
09-03-2010, 05:18 PM
Although one advisory service has recommended Kinross shareholders vote yes on the Red Back acquisition, another, ISS, Institutional Shareholder Services, has just come out against it. K and RBI have issued a press release today saying they disagree with the ISS conclusion and look forward to the combination being approved at the meetings. Today K was up and RBI wasn't. I think if this doesn't go through, RBI will be fine on its own, or go for a much better price before end Jan. 2011. Sept. 15 approaches...

Canudigit
09-03-2010, 10:48 PM
The K and RBI meetings to vote occur at 10AM Sept. 15 in Toronto and am assuming voting starts after 10:20. Goldstein-Jacobson says when the Moon's "final aspect is bad it signifies an unsatisfactory end of the matter", (and the Moon makes ONLY bad aspects - squares to Uranus and Jupiter) but the ruler of the first house, Pluto, is in good aspect to ruler of matter (I think) 7th house (Venus), and to Mars and Mercury (although it also squares Saturn, Uranus and Jupiter). Without those good aspects, I could see failure for sure.

Canudigit
09-11-2010, 03:07 PM
This week Canaccord Genuity's Steven Butler endorsed the merger and issued a buy on K., raising the price target to 24.75US(it closed at 17.47 on the TSX on Fri.) within the next year.
Looks like we have a go on this deal.

canadianglow
09-11-2010, 05:46 PM
I sat on the toilette for about an hour yesterday reading through my shareholder info package. I still think the merger isn't a bad idea, especially if Mr. Tye Burt turns out to be right on the reserve potential of the takeover properties.

I dunno - i'm in at a 22.00 average on this stock, i've basically forgotten about it - it's just sitting in the background accumulating dust - hopefully one day i'll discover the shares have hit 30 (like they were supposed to have sometime last year). Until then, it remains a thorn in my side.

Canudigit
09-12-2010, 11:00 AM
Canadianglow, I think most people who've invested in metals stocks have got a few thorns in their side. ( I know I do.) Hopefully, there's some stars in your portfolio too. Speaking of stars, I've been trying to get my hands on Tye Burt's date of birth (no luck yet), to work up a chart on him and see if he's got the wind at this back after this thing goes through.

canadianglow
09-12-2010, 01:23 PM
Canadianglow, I think most people who've invested in metals stocks have got a few thorns in their side. ( I know I do.) Hopefully, there's some stars in your portfolio too. Speaking of stars, I've been trying to get my hands on Tye Burt's date of birth (no luck yet), to work up a chart on him and see if he's got the wind at this back after this thing goes through.

Kinross holds a special thorn in my side. After riding the SP from 16 to 24 I had sold most of my shares. Afterwards I somehow had an uncleared limit order that was still in my brokerage account for Kinross. Essentially I ended up buying another 3 grand worth of "K" at 22.05 as the SP fell all the way down to 15ish. Haha, aint life grand?

Anyways, Tye Burt is 53 years old according to the following sept. 2008 article which at the time said he was 51

http://www.stockhouse.com/Blogs/ViewDetailedPost.aspx?p=83302

Canudigit
09-15-2010, 10:03 AM
Kinross shareholders voted some 66% in favour of the takeover deal of Red Back Mining this morning. RBI shareholders voted 99.6% in favour.
I'd like to say my RBI shares no vote constituted the entirety of .4% negative vote, but if I had that much RBI, I'd be sipping a cool drink in the Bahamas right now...