Silver producer Fresnillo PLC (LSE: FRES) said it has withdrawn its proposal to make an offer for MAG Silver Corp (TSX: MAG) because even though it has been six months since it announced the plan, it has not been possible to conclude the independent valuation of MAG in order to permit the offer to proceed and it is not clear to Fresnillo when or if this will happen.
Fresnillo announced in December 2008 it plans to make a US$4.54 per share cash offer for the MAG shares it does not already own, to be made via unit Fresbal Investments Ltd.
MAG's Independent Committee expressed it was not satisfied with the level of information that Fresnillo has been willing and able to produce in order to conclude the valuation beyond the information regarding the property jointly held by Fresnillo and MAG.
However Fresnillo and its advisors have received the advice of valuation experts such as Paradigm Capital Inc, in its independent expert's report, and Scotia Capital, as financial advisor to Fresnillo, that a valuation could be prepared for such purposes with the information that Fresnillo was willing and able to produce.
These risks to the successful completion of the transaction have resulted in Fresnillo's decision to withdraw its offer for MAG immediately. Despite the withdrawal Fresnillo remains committed to the growth of the company, and its growth objectives remain intact, it added.