Endeavour Mining drops £1.5bn bid for London’s Centamin
14 January 2020, 12:44
The Canadian giant had hoped to ride a consolidation wave.
A Canadian gold giant has dropped its multibillion-dollar ambitions to take over Centamin, the UK’s third-largest gold miner, after a series of major mergers in the sector.
Endeavour Mining said it had not been given enough information from the London-listed company to press ahead with a firm bid.
It had been forced to go back to the drawing board in early December when Centamin’s board rejected a 1.9 billion dollar (£1.5 billion) deal from across the pond.
The board told Endeavour to do better than an offer which, it claimed, undervalued the business.
However, it later indicated that the deadline for a firm bid would not be extended. The deadline was due to lapse on Tuesday.
In light of that, and poor information, Endeavour said it had decided to walk away from the potential deal and end merger talks.
“The quality of information received during the accelerated due diligence process has been insufficient to allow us to be confident that proceeding with a firm offer would have been in the best interests of Endeavour shareholders,” said Endeavour chief executive Sebastien de Montessus.
However, Mr de Montessus left the door unlocked to a future tie-up between the brands, saying: “We remain convinced about the strategic rationale of combining Endeavour and Centamin to create a diversified gold producer with a high-quality portfolio of assets.”
Centamin, which saw shares drop by 4.5% to 121.4p on the news, in December said that merger talks had stalled, adding that Endeavour had “repeatedly refused to engage in a proper manner”.
It said on Tuesday that the two companies had engaged constructively but were not able to see eye-to-eye on value.
Endeavour was hoping to follow its peers that have been leading rapid consolidation in the gold sector.
Barrick Gold chief executive Mark Bristow briefly overtook Newmont’s Gary Goldberg as the world’s most important gold boss in 2018, when Barrick bought Randgold, the company Mr Bristow had built, for 5.4 billion dollars (£4.1 billion) and installed the South African as its chief.
However just three months later, not to be outdone, Mr Goldberg struck a massive 10 billion dollar (£7.7 billion) deal to buy Goldcorp.
Mr Bristow, seemingly determined to remain top dog, then launched an audacious 18 billion dollar (£13.8 billion) hostile bid for Newmont, which would have scuppered the deal with Goldcorp, and sealed Mr Bristow position. The bid was later dropped.