Pegasus completes offering in takeover bid for Zapopan

In a takeover bid for the outstanding portion of its Australian subsidiary, Pegasus Gold (TSE) has completed a US$100-million offering in convertible subordinated notes.

The notes, due in April, 2002, carry an annual interest rate of 6.25% and can be converted into common shares at a price of US$14.92 per share.

Pegasus wants to acquire the 42% of the shares of Zapopan N.L. that it does not already own. Zapopan owns the Mt. Todd gold mine in the Northern Territories of Australia.

Pegasus’s bid will be A$2 (US$1.47) per share of Zapopan, which is a 33% premium over its last trading price. The value of the transaction is about A$135 million (US$99 million).

Any proceeds left over from the acquisition will be used for debt repayment, capital expenditures and potential acquisitions.