Vancouver-based Aurizon Mines Ltd. (TSX:ARZ) is advising its shareholders to reject a hostile takeover bid by Toronto-based Alamos Gold (TSX:AGI) and has adopted a shareholder rights plan.
George Brack, chair of the special committee of the Aurizon board, said the bid fails to compensate shareholders for “the true value” of the company’s assets.
“This is a financially inadequate and opportunistic offer, timed to take advantage of a transition year for Aurizon that we believe will be the foundation of long-term value creation for our shareholders.”
He added that the company believes there is “increased geopolitical and development risk” associated with Alamos shares.
Brack said the board and special committee are “exploring the full range of value-maximizing alternatives” for Aurizon.
“These include building on existing initiatives and engaging in discussions with third parties regarding potential alternative transactions that create superior shareholder value.”
The Aurizon board announced that it has adopted a shareholder rights plan “to provide the board with adequate time to identify, develop and negotiate value-enhancing alternatives, if appropriate, to any unsolicited takeover bid, including the Alamos offer and to encourage equal treatment of shareholders in connection with any takeover bid offer.”
The company said it plans to seek shareholder ratification of the rights plan at a March 7 special meeting of shareholders.