Lihir Gold and Ballarat Goldfields Merger

Lihir Gold have proposed to acquire and merge with Ballarat Goldfields through the following scheme: Lihir (LHG) is offering 5 shares for every 54 Ballarat Goldfields (BGF) shares. The deal equates to some 28.8 cents per share and a value of $350 million. The merger offer on the table is a 28 percent premium to the last traded price for Ballarat Goldfields. BGF directors have recommended the proposal. Ballarat is developing the Ballarat East deposit, and a recent development plan change required funding of $120m. Investment Bank and stock analyst UBS have maintained their Buy 2 rating for the Lihir Gold stock with a share price target of $3.80 and a stock valuation of $1.59. According to UBS "Lihir has flagged a desire for M&A to diversify its own single mine and political risk. The proposed acquisition would reduce that risk, but Lihir would also take on the resource risk associated with Ballarat, which sees a small proportion of its gold inventory as a JORC compliant resource."

Lihir Gold Limited is listed on the Australian Stock Exchange (ASX) under stock code LHG. You can view their investor website here. LHG was listed on the ASX on 9 October, 1995. Lihir Gold is involved in mining and production of Gold on Lihir Island in PNG. Find out the meaning of the recommendations in this primer. Browse for other broker recommendations. Check your charts and good luck with your share trading!