The three-way merger between Toronto's Yamana Gold Inc. (TSX:YRI), Vancouver's Northern Orion Resources Inc. (TSX:NNO) and Reno, Nevada-based Meridian Gold Inc. (TSX:MNG) remains on thin ice.
Only a third of Meridian shareholders have tendered their shares to Yamana's offer for the company, which is a condition of the Yamana-Northern Orion merger.
Yamana extended its offer to acquire Meridian's shares to September 24 from the previous September 11 deadline. Yamana is offering Meridian shareholders $4 in cash plus 2.235 Yamana shares for each Meridian share.
Meridian, however, maintains that the deal doesn't reflect the company's full value. It said last week it had been negotiating with other suitors.
A failed attempt at buying Meridian could unravel Yamana's Northern Orion acquisition.
In late June, Yamana had announced it would acquire Northern Orion for $1.1 billion, offering Northern Orion shareholders $7.28 per share a 28.4% premium on the 20-day average trading price prior to the announcement.
The deal, however, was contingent on Yamana's acquiring at least two-thirds of Meridian's shares.
Despite Meridian's rejection, Yamana and Northern Orion shareholders have approved the merger, which would create a mid-tier gold producer with estimated annual gold production of more than 1.4 million ounces by 2009.
Northern Orion's share price range during the past week: between $5.35 and $6.30; 52-week high: $6.53; 52-week low: $3.85.