Endeavour Mining lures Centamin for a merger

GEORGE TOWN: Endeavour Mining Corporation is seeking to engage with the Centamin Board with the intention of reaching an agreement on the terms of a recommended all-share merger between Endeavour and Centamin plc.

Endeavour believes that this potential combination would strongly benefit both sets of shareholders due to the compelling long-term value creation opportunity.

After several unsuccessful attempts to engage with the Board of Directors of Centamin, initially in October 2018 and then again on November 11, 2019 regarding the prospects for a merger, Endeavour then submitted a formal proposal to Centamin on November 25, 2019, regarding such combination.

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

In the Proposal, sent to Centamin on November 25, 2019, Endeavour proposed an exchange ratio of 0.0846 Endeavour shares for each Centamin share representing a 5% premium to the 30-day volume-weighted average prices of Endeavour and Centamin (ending November 22, 2019 the last practicable date before making the Proposal) and a 13.1% premium to the closing price of Endeavour and Centamin on December 2, 2019, being the last practicable date prior to the publication of this announcement.

Based on the proposed exchange ratio of 0.0846 Endeavour shares for each Centamin share Endeavour shareholders would own approximately 52.9% and Centamin shareholders would own approximately 47.1% of the combined group’s share capital. The Proposal values the entire issued share capital of Centamin at approximately CAD2,522 million or GBP1,467 million, based on Endeavour’s share price on December 2, 2019, and CAD:GBP exchange rate of 1.72.

Endeavour’s Proposal envisaged that the Board and management of the combined group would be selected with representation from both Endeavour and Centamin, reflecting the spirit of a merger.

Commenting on today’s announcement, Michael Beckett, Chairman of the Board of Directors of Endeavour, said: “We firmly believe that the proposed combination between Endeavour and Centamin provides a compelling value creation opportunity for both sets of shareholders which is superior to what can be achieved by each company on a standalone basis. Despite repeated good faith attempts to engage with Centamin, our efforts have been frustrated by their refusal to entertain any discussions about a Merger before entering into a standstill agreement. A standstill would have the effect of precluding us from taking the Proposal to shareholders if the Proposal was not seriously considered by Centamin. We have therefore decided that, due to the strong merits of the Merger and its potential to create value, it is necessary to make public our proposal so that the voices of shareholders are heard.

Our management team has demonstrated a disciplined approach to business development opportunities and the Endeavour Board will continue to be prudent allocators of capital to opportunities that it believes are aligned with its long-term strategic objectives, and that create value for shareholders.”

Sébastien de Montessus, President & CEO of Endeavour said: “After having completed the turnaround of our asset portfolio, we are well-positioned to focus management efforts on a new phase in our growth strategy. We believe that the Centamin’s shareholders are currently disadvantaged by the Sukari mine being managed within a single-asset portfolio, by the recent operational challenges and the ongoing leadership transition at Centamin. There would be immediate potential benefits from integrating Sukari into a multi-asset portfolio that is managed with a long-term value focus and with La Mancha as a key cornerstone shareholder. Building on our operational track record, we believe that with the combined management team, we would be ideally positioned to improve the efficiency of Sukari and deliver stronger value to both sets of shareholders.”

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