Business Services Industry
Definitive Merger Agreement and Plan of Reorganization Signed by Rea Gold Corporation and American Resource Corporation
Business Wire, March 5, 1996
GREENBRAE, Calif.--(BUSINESS WIRE)--March 5, 1996--Rea Gold Corporation ("Rea") (TSE: REO) and American Resource Corporation, Inc. ("ARC") (NASDAQ: AREE) announced today that they have signed a definitive Merger Agreement and Plan of Reorganization, which is now subject only to shareholder approval and customary closing conditions.
The execution of this agreement followed completion of due diligence by both companies and the receipt of fairness opinions from Goepel Shields and Partners and Deutsche Morgan Grenfell Canada Limited on behalf of Rea and ARC, respectively.
It is estimated that at the time of merger, the combined companies will have a market capitalization in excess of C$250 million based upon current share prices.
Under the terms of the agreement, ARC will merge with a wholly-owned United States subsidiary of Rea. ARC shareholders will receive 2.24 shares of Rea for each ARC share held, plus or minus an adjustment based on the market or realized value of the Northern Orion shares held by ARC as of Jan. 10, 1996.
W. James Hogan, currently President and CEO of Rea, will become Chairman of Rea. Ian Smith, currently Chairman, President and CEO of ARC, will become President and CEO of Rea. The Board will be comprised of six Directors, three each appointed by Rea and ARC.
It is expected that the joint proxy and registration statement will be filed shortly and that the merger will be put to shareholder vote by the end of May.
CONTACT: American Resource Corporation
Ian B. Smith, 415/461-6868
or
Rea Gold Corporation
W. James Hogan, 604/684-7527
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