Rio Alto to Buy Sulliden Gold for $298 MillionSonja Elmquist
Rio Alto Mining Ltd., owner of the La Arena gold mine in Peru, agreed to buy Sulliden Gold Corp. to expand its production of the precious metal.
Rio Alto will acquire each outstanding common share of Sulliden for 0.525 of a Rio Alto share, the Vancouver-based company said in a statement today. That implies a value of about C$325 million ($298 million), according to data compiled by Bloomberg. Sulliden shareholders will also receive 0.1 share of a newly incorporated company, SpinCo, that will hold Sulliden’s stake in the East Sullivan property in Quebec.
The transaction is subject to shareholder approval. Rio Alto’s financial adviser is GMP Securities LP and its legal counsel is Davis LLP. The financial and legal advisers to Sulliden and its board of directors are Cormark Securities Inc. and Cassels Brock & Blackwell LLP, respectively. The financial and legal advisers to the special committee of Sulliden’s board of directors are National Bank Financial Inc. and Norton Rose Fulbright Canada LLP, respectively.
Rio Alto fell 7.5 percent to C$1.97 in Toronto while Sulliden surged 33 percent to C$1.04.