(Alliance News) - Centamin PLC has agreed to a cash and shares takeover offer from bigger peer AngloGold Ashanti PLC in a deal that values Centamin at about GBP1.9 billion, or USD2.5 billion, the two companies announced on Tuesday.
Centamin operates the Sukari gold mine in Egypt, while AngloGold mines in Brazil, Democratic Republic of Congo, and Tanzania.
Under the terms of the proposed deal, Centamin shareholders will receive 0.06983 of a new AngloGold share and USD0.125 in cash for each Centamin share.
The transaction values Centamin shares at 163 pence, based on the closing price of USD28.80 per AngloGold share on Monday. The AngloGold offer represents premium of 37% to the closing price of 119.50p per Centamin share on Monday.
Centamin shares surged 24% to 148.50 pence early Tuesday in London, giving it a market capitalisation of around GBP1.71 billion.
But shares in AngloGold fell 9.0% to ZAR463.04 in Johannesburg.
Centamin shareholders also will be entitled to receive the interim dividend of USD0.0225 per share.
AngloGold shareholders will own 83.6%, and Centamin shareholders 16.4% of the merged company.
The acquisition is subject to Centamin shareholder and regulatory approvals. Centamin directors will unanimously recommend the deal to shareholders.
"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," Centamin Chair James Rutherford said.
The takeover is expected to complete during the fourth quarter.
The addition of the Sukari mine increases AngloGold's annual gold production by 450,000 ounces, so its total would have been over 3 million ounces in 2023.
"Today's transaction is highly compelling and builds on the strong foundation we have built. It adds to our portfolio the pre-eminent gold producer in Egypt, and offers enormous geological potential that we are very well placed to develop," AngloGold Chair Jochen Tilk said.
"The transaction offers attractive returns for our shareholders and is aligned with our approach of prudently allocating capital to optimise our portfolio."
In a separate trading statement, Centamin said its gold production was 93,278 ounces for the two months of the third quarter that ended August 31 and gold sales were 102,563 ounces over this period from the Sukari mine. For the first nine months that ended August 31, gold output was 318,017 ounces.
Revenue for the two-month period was USD248.6 million and top-line for nine months was USD713.7 million.
Its gold production guidance range is for the current financial year is 470,000 to 500,000 ounces.
By Artwell Dlamini, Alliance News reporter
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