The deal between these two just hit the wire. I know CDE is one of your picks in Silver.
What is your take on CDE following this announcement?
CDE announced that it will acquire NGD in an all-stock transaction, where each NGD shareolder will receive 0.4959 CDE shares for each NGD share. The acquisition is valued around $7B. CDE is down on the news as it is an all-stock transaction, and investors always worry about the immediate share dilution, without immediate benefits to its financials. This acquisition can help to divserify CDEs mining operations from mostly silver to now gold, silver, and copper. We think this can help to build out CDEs business long-term, but we will need to assess in future earnings for potential realized synergies from the deal, and how the price of gold, silver, and copper will impact its earnings. This typically happens to the acquirer in M&A, and largely, we think it is a decent deal, but we think it will need time for the markets to digest. We continue to like it here.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in CDE.