Yamana Gold Inc. (TSX:YRI), which is working on a three-way merger with Vancouver-based Northern Orion Resources Inc. (TSX:NNO), has increased its cash offer for Meridian Gold Inc. (TSX:MNG) by $0.85 per share to $4 plus 2.235 Yamana shares.
Yamana has also waived the deal's due diligence condition and extended the offer to September 7.
The Toronto gold producer plans to pay for the cash portion of the acquisition using a new $400 million five-year loan.
Nevada-based Meridian, which had rejected Yamana's initial $3.3 billion hostile takeover offer, said it's reviewing the revised deal.
A failed attempt at buying Meridian could unravel Yamana's Northern Orion acquisition.
In late June, Yamana had announced it would acquire Northern Orion for $1.1 billion, offering Northern Orion shareholders $7.28 per share or a 28.4% premium on the 20-day average trading price prior to the announcement.
The deal, however, was contingent on Yamana's acquiring at least two-thirds of Meridian's shares.
Despite Meridian's rejection, Yamana and Northern Orion are still recommending their shareholders approve the merger. A vote is expected August 22.
The deal would create a mid-tier gold producer with estimated annual gold production of more than 1.4 million ounces by 2009.
Northern Orion's share price range during the past week: between $5.16 and $5.41; 52-week high: $6.53; 52-week low: $3.85.