UPDATE: Centamin Rejects Hostile Merger Approach From Endeavour Mining

(Alliance News) - Gold miner Centamin PLC on Tuesday said the combination proposal made by ...

Alliance News 3 December, 2019 | 9:39AM
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(Alliance News) - Gold miner Centamin PLC on Tuesday said the combination proposal made by Canadian peer Endeavour Mining Corp would provide greater benefit to Endeavour's shareholders than to its own shareholders and does not reflect the contribution that would made by Centamin to the merged entity.

In response to the GBP1.47 billion all-share combination proposal, Centamin, which operates the Sukari gold mine in Egypt, also said that it is "better positioned" to deliver shareholder returns on a stand alone basis than the combined entity and, as result, its board has unanimously rejected the proposal.

Under UK takeover rules, Endeavour has until December 31 to either make a firm offer for Centamin, or walk away.

Centamin shares were 7.4% higher at 120.47 pence each in London early on Tuesday morning. Endeavour shares closed 1.7% higher at CAD25.79, roughly GBP14.95, in Toronto on Monday

Earlier on Tuesday, Endeavour said it had unsuccessfully attempted to engage with Centamin over an all-share merger

The offer values Centamin at GBP1.47 billion and proposes a share-exchange ratio of 0.0846 Endeavour share for each Centamin share. Were the merger offer to go ahead, Endeavour shareholders would own just shy of 53% of the new company, while Centamin shareholders would have just over a 47% stake.

The deal represents a 13% premium to Centamin's closing price on Monday of 112.20 pence, Endeavour said.

Endeavour said it made "several unsuccessful attempts to engage" with the Centamin board, initially in October 2018, and again in November 2019.

Endeavour explained: "As meaningful engagement has still not been forthcoming, Endeavour is today announcing the terms set out in its proposal in an effort to encourage the Centamin Board to engage in discussions."

Centamin "unequivocally rejected" Endeavour's initial approach in October last year, the latter said.

Endeavour added: "On November 28, Centamin responded to the proposal with a continued refusal to discuss the prospects for a merger or its terms prior to the execution of a standstill agreement and non-disclosure agreement.

"Mindful of Centamin's response to Endeavour's proposal in October 2018, Endeavour believes that Centamin's insistence on a standstill agreement as a pre-condition to discussing the prospects for the Merger, or even preliminary terms which would be subject to reciprocal due diligence, risks denying Centamin shareholders a voice in the compelling strategic merits of a combination."

A combined Endeavour and Centamin would have a pro-forma 2019 gold production of 1.2 million ounces in 2019, making one of the top 15 gold producers in the world, Endeavour said.

By Eric Cunha and Tapan Panchal; ericcunha@alliancenews.com; tapanpanchal@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Centamin PLC 129.25 GBX 0.51 -

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