ANGLOGOLD Ashanti has launched a $2.5bn share and cash takeover of Centamin, the 470,000 ounce a year African gold miner.
The offer, which has received the irrevocable support of Centamin’s board, values the UK-listed company’s shares at 163 pence, representing a 36.7% premium to its closing price on Monday, and a 37.6% premium to its 30-day volume-weighted average price.
Centamin operates the Egyptian gold miner Sukari which produced 224,738 oz in the first half of this calendar year. It also recently completed a definitive feasibility study on Doropo, a project in the Ivory Coast it expected to cost $373m.
If concluded, the acquisition of Centamin will boost AngloGold’s production to nearly 3.1 million ounces annually making it the world’s fourth largest gold producer. Sukari also helps lower AngloGold’s all-in sustaining cost (AISC), averaging $1,196/oz for the 12 months ended December compared to AngloGold’s $1,500 to $1,600/oz guidance for the current financial year.
The initial reaction was negative for AngloGold with its shares falling just over 7% on the Johannesburg Stock Exchange. Centamin gained 24% to 148.3p/share, way above AngloGold’s offer in the first hour of trade on the London Stock Exchange.
AngloGold CEO Alberto Calderon said the proposed transaction was free cash flow accretive in the first full year of production and net asset value accretive from day one.
“It will also offer additional upsides as we leverage our corporate infrastructure and our core competencies in exploration, operations and asset optimisation,” he said.
The deal is one of the latest in mining sector merger and acquisitions and follows rival Newmont’s $14.5bn takeover of Newcrest last year and Gold Fields’s C$2.16bn pitch for Canada’s Osisko Mining. The total value of mining sector deals across all metals year-on-year increased 3% to $64bn in 2023, according to a report by PwC, an auditing firm.
Under the terms of AngloGold’s offer each Centamin shareholder will be entitled to receive 0.06983 new AngloGold shares and $0.125 in cash. The offer, including new shares issued to Centamin, values the company at £1.9bn ($2.5bn).
AngloGold Ashanti shareholders will own about 83.6% of the combined company’s enlarged share capital while Centamin shareholders will own about 16.4%. Centamin shareholders will also be eligible to receive its recently declared interim dividend, which was due to be paid in September, of $0.0225 per Centamin share.
Centamin’s support for the offer is equal to 2,184,515 shares or 0.188% of the company. Its CEO Martin Horgan said the transaction would enable Centamin’s assets to continue growing. Sukari was also an important asset in the Nubian Shield, a gold district attracting fresh attention in Egypt after the country’s government liberalised its mining regulations.
AngloGold said the transaction was expected to be completed in the fourth quarter while Centamin shareholders are due to meet about the scheme around October 28. The prior consent of the Egyptian government is not required outside of competition approval.
