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catoismymotor (41.19)

AUQ and NXG Sitting In A Tree...

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August 29, 2011 – Comments (25) | RELATED TICKERS: AUQ , NXG.DL

AuRico Gold to Acquire Northgate Minerals and Create A Leading Intermediate Gold Company

25 Comments – Post Your Own

#1) On August 29, 2011 at 9:57 AM, catoismymotor (41.19) wrote:

I own both. I suppose that soon I will really own just AUQ, and lots more of it.

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#2) On August 29, 2011 at 10:04 AM, Frankydontfailme (27.25) wrote:

:) I own both also. Are you selling some NXG in case the deals doesn't go through?

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#3) On August 29, 2011 at 10:05 AM, Frankydontfailme (27.25) wrote:

 

 Looks like a sure thing now that I read the details

The acquisition of Northgate by AuRico will be completed by way of a court approved plan of arrangement. The Agreement has been unanimously approved by the Boards of Directors of AuRico and Northgate. UBS Securities Canada Inc. provided a fairness opinion to the Board of Directors of AuRico and GMP Securities L.P. and Macquarie Capital Markets Canada Ltd. provided fairness opinions to the Special Committee and Board of Directors of Northgate.

 

The transaction is subject to approval by 66 and 2/3% of the votes cast by holders of Northgate common shares at a special meeting of Northgate shareholders expected to be held in October. The transaction is also subject to obtaining approval by a majority of votes cast by the shareholders of AuRico at a special meeting of AuRico shareholders expected to take place on the same date as the Northgate meeting, as well as certain other customary conditions. Closing of the transaction is expected in October. The Agreement includes customary deal protection and non-solicitation provisions including reciprocal break fees, right to match and fiduciary-out provisions.

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#4) On August 29, 2011 at 10:10 AM, catoismymotor (41.19) wrote:

Since this news is so fresh I'm still evaluating my next move. I like the idea of selling all of NXG buying some more AUQ while their price is down 10%.

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#5) On August 29, 2011 at 10:11 AM, texasflyfish (51.75) wrote:

I own both as well.  Barker rated Northgate so high I was just building a position in it.  Now we will all have more AuRico which should be good.

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#6) On August 29, 2011 at 10:19 AM, Frankydontfailme (27.25) wrote:

That was my gut reaction as well cato. 45% premium buyout. Right now around 38%.... so pretty close. Unlikely to be much downside but I could use the money from the nxg shares for auq or brg 

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#7) On August 29, 2011 at 10:22 AM, Frankydontfailme (27.25) wrote:

I should add that I'm a complete newb and have no idea what I'm talking about incase someone follows my thinking.

Another great call by Sinch though. Can't wait to see how bullish he is on the new auq :)

Has the primero deal been finalized?( this is along for the ride no?) 

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#8) On August 29, 2011 at 10:29 AM, mhy729 (32.50) wrote:

This has also created a potential buying opportunity for Primero (PPP), which has gone down b/c its merger deal with Northgate has been terminated by NXG in favor of the new arrangement with AuRico.

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#9) On August 29, 2011 at 10:37 AM, Frankydontfailme (27.25) wrote:

Interesting ineed. Very tempted to pick up some PPP and or AUQ today if they go lower

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#10) On August 29, 2011 at 10:45 AM, Jbay76 (< 20) wrote:

Wait, the Primero deal went south in order for NXG to join AUQ????  This is like a dating game...

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#11) On August 29, 2011 at 10:46 AM, Frankydontfailme (27.25) wrote:

And Alexandria likes the news because she thinks she's a mistress target :)

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#12) On August 29, 2011 at 11:00 AM, mhy729 (32.50) wrote:

This is from Primero's website re: termination of the deal with Northgate:

http://www.primeromining.com/NEWS--Events/News-Releases-Details/2011/Primero-Announces-Termination-of-Arrangement-Agreement-With-Northgate-and--Receipt-of-25-Million-Break-Fee1126419/default.aspx 

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#13) On August 29, 2011 at 11:57 AM, jwebbzor (< 20) wrote:

So Primero will recieve $25 million from NXG because they broke the contract? That is larger than their quarterly gross profit...

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#14) On August 29, 2011 at 12:15 PM, Jbay76 (< 20) wrote:

Alexandria is a mistrss target for who?

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#15) On August 29, 2011 at 12:22 PM, Frankydontfailme (27.25) wrote:

Not sure Jbay, but I hear through the grapevine that she gets around :)

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#16) On August 29, 2011 at 12:30 PM, Frankydontfailme (27.25) wrote:

Seriously, I have no reason to think it's a takeover prospect... except that it is obviously is and the bump today suggests that mr. market agrees.

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#17) On August 29, 2011 at 2:25 PM, Jbay76 (< 20) wrote:

This is somewhat akin to a gossip session now :P

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#18) On August 29, 2011 at 2:31 PM, TeamGirth (< 20) wrote:

in my rookie eyes AUQ would be a great purchase, especially with todays decline by a decent nearly 20%.. or will this merger cause such a dilution of share value that it will continue to go down with the only benefit being previous NXG shareholders?

 any speculation is appreciated, would like to take a stance with AUQ but unsure how mergers like this pan out for the shareholders of the parent company

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#19) On August 29, 2011 at 2:31 PM, TeamGirth (< 20) wrote:

in my rookie eyes AUQ would be a great purchase, especially with todays decline by a decent nearly 20%.. or will this merger cause such a dilution of share value that it will continue to go down with the only benefit being previous NXG shareholders?

 any speculation is appreciated, would like to take a stance with AUQ but unsure how mergers like this pan out for the shareholders of the parent company

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#20) On August 29, 2011 at 2:50 PM, SN3165 (< 20) wrote:

So, newb question... I am a Northgate shareholder...trying to take this all in... what's the best plan of action from here?

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#21) On August 29, 2011 at 3:17 PM, catoismymotor (41.19) wrote:

I sold all my NXG and used 2/3 of the money to buy AUQ while it was down 20%. The remaining money I have set aside for another day.

What I just did was in my opinion most prudent: I locked in a great profit for the year and turned most of the cash around to make a purchase at a great discount.

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#22) On August 29, 2011 at 3:19 PM, Jbay76 (< 20) wrote:

SN3165

The answer to your question depends on what your investment thesis was when you bought shares of NXG.  Did you expect long-term appreciation?  Did you intend to hold it for a quick 4% gain?

 

The fact is that NXG and AUQ both have a lot of upside potential for years to come by theirselves.  Now, with NXG becoming part of AUQ, AUQ will have made the transition to a formidable middle-tier miner that will be able to become a big miner in the years to come, IMO.

The kicker is with the deal, where essentiall 3 shares of NXG will be traded for one share of AUQ.  So the question is, how many shares of AUQ will you end up with? Is that enough for your preferences?  Can you pounce on this small dip in AUQ's price now to capitalize on future appreciatio.

basically, you asked a personal question that requires a personal answer, namely yours.  I'd suggest readign up on AUQ and revisiting your investment thesis on NXG.  If after that you like the potential merger, than take opps to increase your exposure in AUQ.  If your not keen on the way things are going, then get out now. 

My problem is that while I own shares of both companies, I do so in 2 different accounts.  To further bum me out, I don'y have more than 3-4 hundred shares of NXG, which by itself results in 100 or so shares in this particular account.  I will most likely sell my NXG in the near future and use those funds to add to either CPFXF and ISLVF leaving my entire AUQ holdings in the other account.  

I'm bummed becuase I was going to add to my position in NXG in the near future and didn't see this one coming. :(  I guess there are worse things to bum one out on...

G' luck...and remember no regrets chief

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#23) On August 29, 2011 at 3:40 PM, XMFSinchiruna (27.75) wrote:

Hi Fools,

Due to Hurricane Irene I was unable to reconnect with the financial world until just now.

What an incredible turn of events here. Give me some time to get down and dirty with the details, and please look for my full analysis of this deal tomorrow.

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#24) On August 30, 2011 at 8:14 AM, XMFSinchiruna (27.75) wrote:

Hi again,

Thank you in advance for your patience. My analysis of this deal will have to wait until Wednesday.

In the meantime, comments #8 and #9 above strike me as rational responses. :)

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#25) On August 30, 2011 at 2:40 PM, catoismymotor (41.19) wrote:

Chris,

Thank you for chiming in. I look forward to reading what you have to say when you are ready.

Cheers,

Cato

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