Egyptian gold mine owner snubs $1.9bn Endeavour bid

The Sukari gold mine, 700 kilometers from Egypt’s capital, Cairo. (Supplied)
Updated 03 December 2019

Egyptian gold mine owner snubs $1.9bn Endeavour bid

  • The Sukari mine is Egypt’s first large-scale modern gold mine

LONDON: 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.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 3 min 9 sec ago

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: