Barrick launches $354M bid for Cadence Energy
Cadence 3-month TSX chart
Seeking to cut its energy costs, Barrick Gold Corp. said Monday it has launched a proposal for a $354-million takeover bid for Cadence Energy Ltd., topping a $300-million offer from Daylight Resources Trust.
Barrick Gold said it is offering $6 per share in cash for Calgary-based Cadence.
Barrick said the proposal to buy Cadence is expected to be part of a long-term strategy by the gold mining company to hedge its exposure to oil costs.
"We are confronting the energy cost challenges facing our industry through this long-term economic hedge of about one-quarter of our direct oil consumption and a significant portion of our direct natural gas consumption," said Jamie Sokalsky, Barrick's executive vice-president and chief financial officer.
Barrick said Cadence's production is 3,600 barrels-of-oil-equivalent per day, consisting of roughly 70 per cent light crude oil.
Shares of Cadence rose more than 13 per cent on the TSX, climbing 72 cents to $6.10. Barrick rose 43 cents to $50.43, while units of Daylight gained $1.14 to end at $12.83.
Cadence said it has received Barrick's unsolicited proposal, but has not agreed to any offer and reaffirmed its support for Daylight's bid.
In late May, Cadence and Daylight struck a deal to merge. Cadence shareholders are due to vote July 22 on that takeover.
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