02/08/2012 04:12 EST | Updated 04/08/2012 05:12 EDT

Eldorado Gold and European Goldfields shareholders urged to vote for merger

VANCOUVER - Two proxy voting firms are recommending shareholders for Eldorado Gold Corp. (TSX:ELD) and European Goldfields Ltd. (TSX:EGU)

Institutional Shareholder Services and Glass Lewis & Co. issued their recommendation early Wednesday ahead of the shareholders' respective meetings on Feb. 21.

ISS and GL say the transaction is financially fair to shareholders of both companies, the strategic rationale is reasonable and market reaction has been favourable.

In December, Eldorado announced a friendly takeover bid for European Goldfields valued at the time at $2.5-billion.

Under the takeover deal, European Goldfields shareholders will receive 0.85 of an Eldorado share and a tiny cash amount _ one hundredth of a cent per share _ for each share.

Eldorado has operations in Brazil, China, Greece, and Turkey and surrounding regions and European Goldfields owns 95 per cent of a lead, zinc and silver mine in Greece. The company also has interests in Romania.

"We are pleased that both ISS and GL support our view that shareholders should support the merger," said Eldorado's CEO Paul N. Wright.

"We maintain our commitment to strengthening performance and providing superior returns for shareholders, which this transaction will help us accomplish."

"The positive recommendations of ISS and GL strengthen our belief that the consideration shareholders will receive is fair, and that it is in their best interests to vote for the merger with Eldorado," added European Goldfields' president and executive chairman Martyn Konig.