TORONTO, ONTARIO -- (Marketwire) -- 03/12/13 -- All amounts are in United States dollars, unless otherwise stated.
Alamos Gold Inc. (TSX: AGI)(NYSE: AGI) ("Alamos" or the "Company") announced today that it has filed an application with the British Columbia Securities Commission ("BCSC") seeking an order to immediately remove the second Aurizon poison pill and prevent payment of the improper break fee to Hecla. A hearing at the BCSC has been scheduled for March 15th, 2013.
Poison Pill. The Aurizon board has taken the extraordinary step of adopting a second poison pill in an effort to prevent Aurizon shareholders from exercising their rights to accept the Alamos offer (the "Alamos Offer"). The previous poison pill was eliminated on March 4th, 2013. The Aurizon board has had more than enough time to seek a superior offer, and was unsuccessful. Alamos fully expects the second poison pill will be cease traded.
Improper Break-Fee. Under Canadian takeover law, a break fee cannot be used to induce an inferior offer. Approximately 30% of the consideration that each Aurizon shareholder will receive will be in the form of Hecla common shares. As such, a proper valuation of the Hecla offer that includes an assessment of the anticipated share price performance of the company resulting from the combination of Hecla and Aurizon, including relative to the share price performance of Alamos shares post Aurizon acquisition, shows quite clearly that the Hecla offer is inferior.
The Hecla break fee is triggered upon Alamos acquiring only an additional 17.3% of Aurizon. The Aurizon board agreed to this knowing that Alamos owned 16.1% of the Aurizon shares, and knowing (from the Alamos affidavit it received in connection with the previous poison pill hearing process) that Alamos had received non-binding expressions of support for the Alamos Offer from an additional 18% of the Aurizon shareholders. As such, Alamos believes that it is unlikely for a plan of arrangement transaction, which requires 66.7% shareholder approval, to proceed. Despite this knowledge, the Aurizon board agreed to give Hecla C$27.2 million upon as few as 17.3% additional shares being tendered and taken up by Alamos. Alamos believes that the Aurizon board did this because it, like Hecla, knew that there was a high degree of risk that Aurizon shareholders would quickly recognize that the Hecla offer was in fact inferior to the existing Alamos Offer.
Alamos' President and Chief Executive Officer, John A. McCluskey, commented, "Contrary to the assertions of George Brack of the Aurizon board, Alamos is forcing no one to tender to its offer. We believe Aurizon shareholders should have the right to choose either way. It is the Aurizon board through poison pills and egregious break fees that is effectively blocking Aurizon shareholders from tendering to the Alamos offer. If the Alamos offer is inferior, as the board asserts, what does the board have to fear?"
Conference Call
Alamos will host a conference call on Tuesday, March 12, 2013 at 10:00 am ET. Participants may join the conference call via either of two methods:
-- http://selfreg6.bellconferia.ca/webportal3/reg.html?Acc=0458303231&Conf= 125030 - Click on the link and register to obtain call-in details for the conference audio. It is recommended that participants register at least 15 minutes in advance to avoid delays in joining the call. The slides can be viewed on the Company's website at www.alamosgold.com; or-- Via webcast on the Company's website at www.alamosgold.com (for audio plus slides).
