Shares in gold miner Centamin (CEY) have shot up 7% to 120p after it received an all-share merger proposal from Canadian gold giant Endeavour Mining Corp.

The deal consists of 0.0846 of its shares for each Centamin share, or just over 126p per share, implying a 13% premium to yesterday’s close.

Endeavour has decided to go public with its offer after it said the FTSE 250 miner had rejected several attempts in engage in talks over a deal, adding that Centamin had rejected an initial proposal last year within 24 hours.

In a statement Endeavour said, ‘Endeavour is therefore today announcing the terms of its proposal in order to allow Centamin shareholders the opportunity to consider the proposal and encourage the Centamin board to engage with Endeavour on the prospects for a friendly recommended merger.’


However, in its own statement this morning Centamin said the merger proposal provides ‘comparatively greater benefit’ to Endeavour’s shareholders, and does not ‘adequately reflect the contribution that Centamin would make to the merged entity’, with the company ‘better positioned’ to deliver shareholder returns than the combined company would be.

Centamin continued, ‘As a result the board has unanimously rejected the proposal.  Centamin will be making a further announcement with its detailed response in the near future.

‘In the meantime, the board strongly advises its shareholders to take no action in respect of the proposal.’


AJ Bell investment director Russ Mould said Endeavour’s decision to go public is a ‘classic manoeuvre’ when a company tries to buy a business but they don’t want to talk.

He added that Centamin is an ‘obvious takeover target’ as its Sukari mine in Egypt is one of the biggest gold deposits among any listed miner and is considered a ‘prized asset’, but its share price has been through a few rough patches in the last couple of years due to operational issues.


Mould said, ‘Centamin has been looking at opportunities beyond Egypt for numerous years but there has been no progress towards actually developing a second mine.

‘Getting hitched to Endeavour would create a much bigger company with numerous projects and geographical diversity – something which investors would no doubt be hungry to back.

‘The key sticking point is likely to be price. Centamin probably has the view that its recent sluggish share price isn’t indicative of the true value of the company when taking a long-term view.

‘Endeavour may have to rummage deeper in its pockets to see if it can find a few more nuggets to sweeten the terms of the proposed deal.’

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Issue Date: 03 Dec 2019