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M&A levels touching

top of pyramid

by Muvija M and Zandi Shabalala, Reuters

old miner Centamin plc rejected a $US1.9 billion all-stock broker Peel Hunt said.
Gtakeover proposal from Canada’s Endeavour Mining Corp, Endeavour said Sukari would also benefit from the fact that La
saying it did not offer enough value to Centamin shareholders. Mancha – a private gold mining group chaired by Egyptian billionaire
Endeavour announced its offer, a 13% premium to Centamin’s last Naguib Sawiris – would become a key investor. The Sawiris family
closing price on December 3, seeking to gain control of Centamin is Endeavour’s top shareholder with a 30% stake.
assets that include the Sukari mine and Cleopatra project in Egypt “We believe in the strategic rationale for this proposal and are fully
and exploration projects in West Africa. supportive,” Sawiris said in a statement, urging Centamin’s board to
The Toronto-listed firm, which owns four West African mines, said engage with Endeavour.
Centamin had rebuffed several attempts to engage in talks. A top Centamin investor said Egyptian government approval would
“The terms of the proposal provide comparatively greater benefit be key to sealing the deal.
to Endeavour’s shareholders, do not adequately reflect the Endeavour first showed interest in Centamin in 2018 with a
contribution that Centamin would make to the merged entity,” proposal that was promptly rejected. It then sent a formal proposal
Centamin said in a statement. last month, hoping to engage with Centamin’s board.
Endeavour said it planned to offer 0.0846 of its own shares for The Canadian miner Centamin’s board had refused talks without
each Centamin share, worth about 126.27 pence per share. a so-called standstill agreement, which could restrict Endeavour’s
The combined entity would have produced 1.2 moz of gold in options in pursuing a deal.
2019 at AISC – a key industry benchmark – of $US875/oz, which If Endeavour succeeds in its plans, its shareholders would own
would make it one of the world’s largest and lowest cost miners, about 52.9% of the merged entity, while the rest would be held by
Endeavour said. Centamin shareholders.
Centamin shares, which have underperformed Endeavour’s over
the last two years, were up 13.5% higher at 127.30p, on track for
their biggest one-day jump since 2015 and signalling investors
think the proposed bid could be increased.
Endeavour’s shares fell 3%.
“My idea of fair value is a lot higher up, it probably starts with a
2,” said Eric Moore, portfolio manager at Miton Group, the ninth
biggest shareholder in Centamin with a stake of about 1.4%, Perth, Western Australia
according to Refinitiv Eikon data.
“It might be this is just an opening shot and we’ll see how it
evolves.” The USB of Conference
The gold industry has seen a flurry of deals over the past year as Proceedings for the 2019
companies attempt to squeeze more value from operations after
years of subdued activity and low returns. Africa Down Under Conference
Barrick Gold Corp’s purchase of Randgold was followed by the is Now Available
Newmont Mining Corp and Goldcorp tie-up, and, more recently,
the $US1 billion takeover of Continental Gold Corp by Zijin Mining Conference Proceedings Includes:
Group.
• Over 70 presentations • Global media coverage
Mark Burridge, fund manager at Baker Steel Capital Managers
• Australia’s Paydirt preview and review editorial coverage
which owns shares in Centamin and Endeavour, said the deal
• Conference Sponsors
was compelling because it would create a larger and “more
investible” entity.
Centamin has struggled shifting from open pit to underground at
the Sukari mine and said in October it was looking for a new chief $100 (incl. GST)
executive after its incumbent retired. Phone (+61) 8 9321 0355
“We believe the Endeavour all share merger proposal for or email kale@paydirt.com.au
Centamin would provide the management and operational www.africadownunderconference.com
direction Centamin has lacked for the past two years,” analysts at

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