Waterton Group extends bid for Chaparral to April 22 in deal with takeover target

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TORONTO – A precious metals fund managed by the Waterton Group is extending its hostile bid for Chaparral Gold Corp. (TSX:CHL) until April 22 under a deal with the Canadian-listed but Nevada-based takeover target.

Waterton said Tuesday that it has agreed not to take up or pay for any shares tendered under its offer until then in exchange for Chaparral’s agreeing to an order immediately cease trading securities under its shareholder rights plan.

Meanwhile, Waterton is entitled to communicate with Chaparral shareholders and enter into lock-up agreements in respect of the offer. The fund is managed by Waterton Global Resource Management, a mining-focused private equity money manager based in Toronto.

For its part, Chaparral, which has two Nevada properties including one at the permitting stage, has not changed its recommendation that shareholders reject the offer.

“Chaparral continues to actively manage a robust process in pursuit of value-enhancing alternatives that are in the best interests of the Chaparral shareholders,” it said in a statement.

“This white knight process is now well advanced and Chaparral’s management believes the new deadline . . . will provide sufficient time to announce a value-enhancing alternative . . . ” it said.

Waterton launched its cash offer of 50 cents per share, which valued Chaparral at $58.8 million, back in February, an offer which prompted an immediate 10 per cent increase in the share price to 54 cents. The issue closed up a penny at 62 cents Tuesday on the Toronto Stock Exchange.

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