Now that naked shorting has provided an endless supply of junior corpses, it appears hedge funds are now moving in for the feast.

Regards - VHF

-

Major hedge fund making $120M bid for Crocodile Gold

Following on from other gold investments, Luxor Capital Group, a sizeable New York-based hedge fund, is going after Crocodile Gold through a takeover.

Kip Keen - Mineweb

December 14, 2011

A leading U.S. hedge fund, Luxor Capital Group, kicked off a takeover of miner Crocodile Gold (TSX: CRK), signalling a further push into gold assets for the New York-based investment company.

On Tuesday, Luxor said it would buy up to 215.5 million Crocodile Gold shares for C$0.56 a share, representing a 60% premium over the day's previous close. The stake would add to the 10-percent of Crocodile Gold that Luxor already owns and, if it fully succeeded, means Luxor would own 85% of Crocodile Gold's outstanding shares.

Responding to a press release issued by Luxor, Crocodile Gold, which operates a series of gold mines and milling facilities in northwestern Australia, said it was aware of the offer and would strike a committee to consider the takeover after it received the official offer.

While the near-$3 billion fund, led by investor Christian Leone, has long held mining assets - for example it has owned shares in BHP Billiton for some time - the move on Crocodile Gold marks what looks to be a shift toward an increasingly gold-heavy portfolio.

According to SEC filings, Luxor catapulted its holdings in SPDR Gold Trust from less than 100,000 shares earlier this year to some 4.9 million shares as of September 30, 2011. At last count that made SPDR Gold Trust by far the most valuable asset in Luxor's portfolio: worth around $760 million and making up almost a third of Luxor's SEC-reported holdings in terms of cash value.

Luxor also owns numerous and otherwise diversified assets, including stakes in: News Corp., a media company; Nordion, a medical products company; Abercombie & Fitch, a clothing company; and Cardero Resources, a Canadian junior exploration company.

In Crocodile Gold, Luxor will get an operating gold miner that in the last quarter produced 18,186 ounces gold at a $2 million operating loss. It will also inherit a miner with a healthy kitty. Crocodile Gold said it had $49 million in cash and its equivalents as of September 30, 2011.