Back to the complete issue
Thursday, 19 December 2019

Centamin says Endeavour refusing to cooperate on value study

M&A WATCH- Centamin claims Endeavour refusing to cooperate on value study: Endeavour Mining is refusing to go ahead with its reciprocal due diligence proposal to Centamin unless the latter asks the London Stock Exchange to extend the deadline for making a merger offer, Centamin said in a filing to the London Stock Exchange. Both companies agreed earlier this week to conduct a “reciprocal due diligence exercise,” less than two weeks after Centamin rejected an all-share merger bid from Endeavour. Under UK merger rules, Endeavour must make a renewed bid by no later than 31 December.

But Centamin is demanding Endeavour sign up for due diligence: “Without Endeavour providing information that is core to the assessment of value, such as its financial model, Centamin cannot properly assess the proposed combination,” the company said in the statement.

A lack of trust: Centamin, which owns the Sukkari gold mine in Egypt, said that the Canada-based company has been repeatedly refusing to “engage in a proper manner,” and that its board believes Endeavour should sign the reciprocal due diligence agreement immediately. Analysts from London-based advisory firm Peel Hunt wrote that the talks are unlikely to progress until one of the companies changes its position, according to Reuters.

Background: Centamin’s board rejected Endeavour’s initial on the grounds that it would disproportionately benefit Endeavour’s shareholders. The Candian miner offered to exchange 0.0846 of its shares for every Centamin share, valuing the latter’s share capital at around USD 1.9 bn. Centamin would have received a 47.1% stake in the new company while Endeavour would have been the majority shareholder.

Reaction: Centamin shares fell as much as 3% on the news, before rallying to close 1% in the red.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.