Canadian Manufacturing

Tahoe Resources to acquire gold miner Rio Alto for $1.3B

The all-stock deal would make Tahoe a mid-sized gold and silver mining concern

February 10, 2015  by The Canadian Press

VANCOUVER—Rio Alto Mining shares jumped 10 per cent in early trading after it agreed to a friendly takeover by Tahoe Resources Inc., which would become a mid-sized silver and gold producer focused on Latin America.

Tahoe’s friendly offer valued Rio Alto at about C$1.3 billion, based on February 6 stock prices for the two companies.

Under the proposal, Rio Alto shareholders will receive 0.227 of a Tahoe share and one-tenth of a cent cash per share, making the offer worth about $4 per share based on Tahoe’s share price before the deal was announced.

Rio Alto shareholders will own about 35 per cent of the combined company.


If a competing offer emerges, Tahoe will have an opportunity to match its rival’s bid. It would receive a $57.6 million termination fee under certain circumstances.

The combined company would produce gold in Peru from Rio Alto’s established La Arena mine and the Shahuindo gold project that’s scheduled to begin production next year.

Tahoe’s main holding is the Escobal silver mine in Guatemala, which has been in commercial productions since January 2014.

The boards of both companies are supporting the proposed deal, which requires approvals from shareholders of both companies.

The companies anticipate the deal will close by early April.

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