Chinese multinational to buy out Allied Gold in $5.5-billion all-cash deal

China’s Zijin Gold International Co. Ltd. has struck an all-cash deal to acquire Toronto-based Allied Gold Corp. in a deal announced on the same day that the price of bullion smashed through US$5,000 per ounce for the first time ever.

Zijin will pay $44 per share, a 27 per cent premium to Allied’s weighted average 30-day trading price last week. Allied’s stock rose above $43 on Monday morning. Gold mining equities are gaining strength with investors as they finally catch up with the underlying commodity that has been pushing through new records for three years and is up 82 per cent in the past 12 months.

The deal still requires approval under the Investment Canada Act, but it would cap a remarkable year for Allied, an intermediate-sized gold producer with assets in African countries, whose share price has surged more than 260 per cent surge in the past year.

 “The announced transaction provides a highly attractive all-cash offer for Allied Gold at what represents an all-time high for the company’s share price, crystallizing significant and certain value for its shareholders,” Peter Marrone, chair and chief executive of Allied Gold, said.