Daylight cedes takeover battle for Cadence to Barrick
Calgary-based Daylight Resources said Monday it has decided against increasing its takeover offer for Cadence Energy Inc.
The move came after Cadence recommended its shareholders accept a higher financial bid from Barrick Gold Corp. According to the current bid, Barrick will pay $410 million, or $6.75 a share, for control of the small Canadian oil producer.
Daylight will receive a $9-million break-up fee in the deal as part of earlier merger negotiations with Cadence.
In late May, Daylight had agreed to purchase Cadence for $301 million, or $5.32 share.
A week ago, however, Barrick launched an unsolicited takeover bid for Cadence worth $350 million, or $6.00 a share. The gold giant eventually hiked its offer to $6.75 a share.
Barrick's final offer represents a 35 per cent premium over Daylight's original proposal.
Barrick said it wants Cadence's oil production as a hedge against rising oil prices.
Cadence produces 3,600 barrels a day of oil, 70 per cent of which is light crude.
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