First Majestic Bows Out of Orko Auction
With several hours remaining before deadline, First Majestic Silver finally decided to put an end to the suspense. In a press release Tuesday evening, the silver and gold miner announced that after careful consideration, it has decided not to match Coeur d' Alene's $383.3 million "Superior Proposal" to buy Orko Silver Corp. .
In a statement, First Majestic President & CEO Keith Neumeyer stated: "It is our view that by increasing the offer beyond our previous bid, the economics of the La Preciosa project drop below our minimum requirements for a rate of return and financial payback to our shareholders; therefore, we will not attempt to match the Coeur offer for La Preciosa."
What this means, in essence, is that Orko is now free to accept Coeur's purchase offer. In so doing, it will be obligated to pay First Majestic a $11.6 million breakup fee. Coeur will presumably now do this.
Coeur d' Alene shares closed down 3.4% at $20.34 in Tuesday trading ahead of First Majestic's announcement. Orko was off 1.6% at $2.43. First Majestic got off relatively unscathed, dropping 1.2% to close at $17.
The article First Majestic Bows Out of Orko Auction originally appeared on Fool.com.Fool contributor Rich Smith has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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