Eldorado withdraws Andean bid

Finance

Canada’s Eldorado Gold Corp has pulled out of the takeover battle with Goldcorp Inc for Andean Resources Ltd, opting not to continue with its C$3.4 billion (US$3.2 billion) offer.

The board of Andean last week recommended a US$3.4 billion cash and share bid offer from Goldcorp, trumping Eldorado’s 0.31/share exchange ratio bid made hours earlier.

Paul Wright, Eldorado president and chief executive, said the company’s shareholders had expressed “a note of caution in terms of Eldorado entering a value destroying auction whose main result will be the enrichment of short-term market participants”.

“Our proposal has been met with broad support from the minority shareholders of Andean and our own shareholders,” he said.

However, he added: “Extensive dissatisfaction exists among Andean shareholders as a result of the board of Andean choosing to focus on the agenda of a large shareholder rather than the interests and desires of its broader shareholder registry.

The major asset on offer from a deal is Andean’s Cerro Negro gold project in Argentina, which has a resource of 3.1Moz of gold and 23.56Moz of silver.

Mr Wright described Cerro Negro as a “good to have” asset, not a “need to have asset”. He also added that “the gold industry, as a whole, has an appalling track record of value destruction and Eldorado has no intention of following in these unfortunate footsteps”.