First Majestic Silver backs out from bidding war over Orko Silver Corp
20 February 2013
First Majestic Silver Corp has backed out from a bidding war with Coeur d'Alene Mines Corp for Orko Silver Corp, holder of one of the world's largest undeveloped silver projects in Mexico.
Vancouver-based First Majestic, which had until yesterday to match a rival offer from Coeur d'Alene Mines, said that it would not hike its offer, leaving only Coeur d'Alene Mines' bid on the table.
"It is our view that by increasing the offer beyond our previous bid, the economics of the La Preciosa project drop below our minimum requirements for a rate of return and financial payback to our shareholders; therefore, we will not attempt to match the Coeur offer for La Preciosa as we do not believe it would be in the best interests of our shareholders, which is always our primary concern whenever we consider any acquisition," said, Keith Neumeyer, president and CEO of First Majestic.
Last week, Coeur d'Alene Mines offered to buy Orko for C$2.70 per share in cash and stock, trumping an agreed First Majestic's all-stock offer worth C$2.72 per share.
Although Coeur d'Alene offer was just lower by C$0.02, Coeur d'Alene Mines claims that its offer is superior since its cash component is 70 Canadian cents per share, compared with C$0.0001 per share of First Majestic.
Orko, which then backed Coeur d'Alene Mines more cash-rich offer, had said that if First Majestic does not amend its offer by 19 February, it will terminate the agreement and pay the agreed termination fee of C$11.6 million.
The battle for Orko Silver lies with its Orko's La Preciosa deposit in Mexico, touted to be one of the world's largest undeveloped silver projects.