Mercator Minerals Ltd. plunged the most since December 2008 after saying Russian billionaire Mikhail Prokhorov’s investment company Onexim Group won’t extend a deadline to complete its reverse takeover of the Canadian miner.
The companies announced in December that Onexim’s Intergeo MMC Ltd. would buy Vancouver-based Mercator. The deal would give Prokhorov, owner of the Brooklyn Nets basketball team, a stock listing in North America. Intergeo, which earlier agreed to extend the deadline on the deal to Aug. 1, won’t agree to a further delay, Mercator said in a statement today.
Closing was delayed after the Russian Federal Anti-Monopoly Services requested more information. The deal will terminate unless the FAS completes its review before the cutoff date, according to the statement.
“We are considering our alternatives in this regard and will continue to provide updates as circumstances develop,” Mercator Chief Executive Officer D. Bruce McLeod said in the statement.
Intergeo will waive non-solicitation provisions in the agreement to allow Mercator to consider alternatives, which the company did not specify in the statement.
Mercator tumbled 25 percent to close at 6 Canadian cents a share in Toronto, the biggest drop since Dec. 18, 2008.
The deal would also give Intergeo control of Mercator’s Mineral Park copper, molybdenum and silver mine in Arizona and two projects in Mexico. Mercator’s stock dropped more than 90 percent last year before the Intergeo deal was announced, as the company struggled to repay debt. The miner said in September it hired BMO Capital Markets to advise on a potential sale or merger.
“We are extremely disappointed in Intergeo’s decision, especially in light of the strong operations and operational cash flows being generated by Mineral Park mine,” McLeod said.
Andrei Belyak, a spokesman for Onexim, declined to comment on Mercator’s statement.