(Adds details of bid, quotes, background on company)
By John Tilak and Nicole Mordant
TORONTO Nov 24 More than 80 percent of Kirkland
Lake Gold shareholders have voted in favor of the
mid-tier miner's takeover of Newmarket Gold, according
to two sources familiar with the situation, marking the end of a
Over 90 percent of the Newmarket shareholders who voted on
the acquisition also backed Kirkland's all-stock offer, valued
at about C$1 billion ($741.34 million) when announced on Sept.
29, the sources said on Thursday on condition of anonymity as
the matter is confidential.
Kirkland Lake shares were down 0.3 percent at C$7.34 on the
Toronto Stock Exchange on Thursday, while Newmarket's stock was
up 0.3 percent at C$3.43. Silver Standard's stock was down 0.3
percent at C$13.12.
The merger plan was briefly disrupted after it emerged that
Kirkland Lake had rejected three joint offers from South
Africa's Gold Fields Ltd. and Canadian-based Silver
Standard Resources Inc. to acquire it. The two withdrew
their offer on Nov. 18.
Some investors had argued that Kirkland Lake too hastily
rejected those offers. Other shareholders and analysts had
publicly said the Kirkland Lake/Newmarket deal offered few
synergies because Newmarket's operations are in Australia while
Kirkland Lake's assets are in Canada.
Van Eck Associates, Kirkland Lake's biggest shareholder with
a holding of nearly 17 percent, was supportive of the deal, fund
manager Joseph Foster told Reuters on Wednesday, reiterating
their position from Nov. 5. He declined to specify how the fund
Kirkland Lake Chairman Eric Sprott, who owns 13.45 percent
of Newmarket shares and 6.7 percent of Kirkland Lake stock,
declared a conflict of interest in the deal.
An Oct. 28 Kirkland Lake circular states that Sprott recused
himself from all of Kirkland Lake's board deliberations,
discussions or board voting on the Newmarket offer.
"The only way an interloper had a chance to intercede in
this transaction was if a wedge could have been driven between
Van Eck and Sprott, as their combined positions in Kirkland were
effectively too large to overcome," said Brad Allen, director of
Branav Shareholder Advisory Services, which advises companies on
corporate governance issues.
"With Van Eck's recent statement of support for the original
transaction, that wedge obviously didn't occur," Allen said.
To succeed, the deal required at least two-thirds of
Kirkland Lake shareholders to vote in favor. It also required
more than half of Newmarket shareholders to support it.
Both Kirkland Lake and Newmarket are holding meetings on
Friday where shareholders can still vote in person on the
transaction. But as is common, most shareholder votes have
already been cast by proxy, meeting a Wednesday deadline.
Gold Fields said on Nov. 18 that it remains interested in
talks with Kirkland Lake if the Newmarket deal is voted down.
($1 = 1.3493 Canadian dollars)
(Reporting by John Tilak in Toronto and Nicole Mordant in
Vancouver; additional reporting by Susan Taylor; Editing by Alan