TORONTO (Reuters) - Canada’s main securities regulator ruled in favor of Yamana Gold Inc’s (YRI.TO) challenge to Meridian Gold’s MNG.TO MDG.N shareholder rights plan on Wednesday, extending Yamana’s hostile takeover bid by four days.
Meridian’s stock price jumped about 5 percent after the Ontario Securities Commission said the company’s poison pill will now expire at 9 a.m. EDT on September 11, provided Yamana’s cash and stock offer is extended to 8 a.m. EDT on September 11.
Reno, Nevada-based Meridian has rejected Yamana’s bid, which would also involve the takeover of Northern Orion Resources NNO.TO, and said it needed more time to entertain possible alternatives.
The bid is worth about C$2.8 billion ($2.7 billion), or C$27.51 a share, based on Wednesday’s closing stock prices on the Toronto Stock Exchange. The original deadline for shareholders to tender their shares was September 7.
Yamana said on Wednesday that more than 3.9 million of Meridian’s 101.2 million outstanding shares had been tendered as of September 4.
“Yamana’s offer to Meridian shareholders has been outstanding for a significant amount of time and no other offer for Meridian has yet emerged,” Toronto-based Yamana said in a statement.
On August 14, Yamana raised the cash portion of its offer by 85 cents to $4 per Meridian share, as well as 2.235 Yamana shares, calling it the “final price.”
The combined companies would have extensive operations in South America, controlling mines and developments in Brazil, Chile and Argentina.
Meridian has said the three-way tie-up with Yamana and Northern Orion is not a good fit for the pure-play gold stock because it would add too much base metals exposure.
It said on Wednesday the OSC decision did not affect its board’s stance.
“We continue to strongly believe that holding Meridian Gold shares is preferable to accepting the inadequate Yamana offer and note that the board of directors’ value maximization process remains ongoing,” Meridian’s chairman, Brian Kennedy, said in a statement.
On August 22, shareholders of Vancouver, British Columbia-based Northern Orion approved the C$1.07 billion takeover by Yamana, which is conditional on a successful bid for Meridian.
Shares of Meridian jumped as news of the OSC decision emerged, rising C$1.50, or 5 percent, to C$31.50 in Toronto, while Yamana closed up 10 Canadian cents, or 0.8 percent, at C$12.31. Northern Orion added 4 Canadian cents, or 0.8 percent, to C$5.18.