Centamin has announced it has agreed to the terms of a takeover by AngloGold Ashanti in a deal to be satisfied by shares in the enlarged group.
This is yet another example of a high-quality UK-listed company being taken over by a foreign player because it is valued below the average valuation of its overseas peers. This deal will be instantly accretive for AngloGold Ashanti.
The deal values Centamin at £1.9bn, a 36.7% premium to yesterday’s close.
Centamin is a textbook junior resource success story, and it will be a shame to see the gold miner disappear into a larger group. The company spent much of the noughties developing the world-class Sukari Egyptian gold project before beginning production at the asset, which is now Egypt’s largest modern gold mine.
Some investors will be pleased with the 36% premium, but the agreed valuation is still below Centamin’s recent highs.
Despite consistently breaking new highs, the gold price hasn’t filtered down into gold mining valuations, especially for London-listed groups.
This has created an opportunity in Centamin shares, which AngloGold Ashanti, a dual US and South African-listed company, has not been able to overlook.
“This Transaction is an endorsement of Centamin’s achievement in re-establishing Sukari as a world-class operation and occurs as the Egyptian Government has taken important steps to attract foreign investment to develop the country’s significant geological potential,” said James Rutherford, the Chair of Centamin.
“The Centamin Board believes that the strategic merits of the Transaction are compelling and that the terms offer Centamin Shareholders participation in the continued growth of our operations under the stewardship of AngloGold Ashanti.
“Our Board is confident that the commitments given by AngloGold Ashanti will result in the continued support for our operations, communities, and our talented and committed people. Therefore, the Centamin Board intends to unanimously recommend this Transaction to Centamin Shareholders.”