British gold miner Centamin has rejected a £1.47 billion ($1.89 billion) all-stock takeover proposal from Canada’s Endeavour Mining Corp, saying it did not offer enough value to Centamin shareholders.
Toronto-listed Endeavour announced its plan earlier in the day, seeking to gain control of Centamin’s only operating mine, the Sukari project in Egypt. The Canadian firm said Centamin had rebuffed attempts to hold talks.
Endeavour said it planned to offer 0.0846 of its own shares for each Centamin share, equivalent to about 126.27 pence per share — a 13 percent premium to Centamin’s last closing price.
“The terms of the proposal provide comparatively greater benefit to Endeavour’s shareholders, do not adequately reflect the contribution that Centamin would make to the merged entity,” Centamin said.
Miners across the globe are looking to boost operations through deals after years of subdued spending, with Barrick Gold buying out Africa-focused Randgold and US-listed Newmont taking over Goldcorp.
Centamin describes its Sukari mine as Egypt’s first large-scale modern gold mine, despite falls in production since 2017.
“Getting hitched to Endeavour would create a much bigger company with numerous projects and geographical diversity — something which investors would no doubt back,” AJ Bell investment director, Russ Mould, said.
Endeavour, which operates four mines across West Africa, said Sukari would benefit from being part of a larger company and from the fact that La Mancha — a private gold mining group chaired by Egyptian billionaire Naguib Sawiris — would become a key investor. The Sawiris family is Endeavour’s top shareholder.
Endeavour first showed interest in Centamin in 2018. It then sent a formal proposal last month. The Canadian miner said on Tuesday Centamin’s board had refused talks without a standstill agreement, which could restrict Endeavour’s options.
“Endeavour is therefore today announcing the terms of its proposal in order to allow Centamin shareholders the opportunity to consider the proposal and encourage the Centamin board to engage with Endeavour on the prospects for a friendly recommended merger,” the company said.
If Endeavour succeeds, its shareholders would own 52.9 percent of the entity, while the rest would be held by Centamin shareholders.