Canadian mining companies Agnico Eagle Limited (AEM) Pan American Silver (NASDAQ: PAAS) (TSE:PAAS) have made an offer to take over Yamana Gold (AUY) in a deal worth $4.8 billion. AEM stock rose 5.7% yesterday, and is continuing to rise in pre-market trading.
The deal will consolidate 100% ownership of the Canadian Malartic mine, one of the world’s largest gold mines. This, in turn, will create a leading precious metals producer in Latin America.
Per the terms of the deal, each Yamana share will be worth $1.04 in cash and 0.1598 Pan American shares, and 0.0376 Agnico Eagle shares, for a total value of $5.02 per Yamana share.
The Yamana management stated that the offer is superior to its planned takeover by South Africa-based Gold Fields Ltd.
Upon approval, Agnico would acquire Yamana’s Canadian assets, including the Malartic mine in northern Quebec.
Is AEM a Good Investment?
The Wall Street community is clearly optimistic about the Agnico Eagle stock. Overall, the stock commands a Strong Buy consensus rating based on eight Buy ratings. Agnico Eagle’s average price target of $60.30 implies 38.9% upside potential from current levels.
The company beat earnings in Q3.
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