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Crocodile Gold Corp (TSE:CRK) (PINK:CROCF) Management Is Evaluating An Acquisition Proposal

by Gediminas Jasionis Dec 15, 2011
CRK_chart.pngCrocodile Gold Corp (TSE:CRK) (PINK:CROCF) stock price remains inflated while the company evaluates an acquisition proposal.

CRK gapped 44% higher on Wednesday carrying along a nearly 25 million trading volume. With such a heavy activity it was one of the most active stocks on the Toronto stock exchange for the day.

The turmoil was caused by an acquisition proposal. On December 13 Luxor Capital Group, LP said an investment fund managed by the company has intentions to acquire up to 215.38 million common shares of Crocodile. Together with CRK stock that's already owned by the funds managed by Luxor it would represent a total of 85% of Crocodiles outstanding stock.

crocodile_logo.jpgCRK share price gapped up because the proposed acquisition contemplates a price of 56 cents per share. Although this was acknowledged by Crocodile, no definitive agreement has been made yet, thus the stock price could gradually decline on the market until one is made.

Both companies will have to work out customary conditions for the deal and receive regulatory approvals. Luxor intends to have the deal made in a way that CRK would remain listed on the TSX. The proposed offer can be accepted by Crocodile within 35 days.

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