Endeavour bid is stonewalled

A CANADIAN mining group has been told to dig deeper after seeing its £1.47billion approach for UK-listed gold producer Centamin rejected.

Endeavour Mining has been trying for merger talks since October last year, but it went public after a formal proposal submitted last week failed to draw any “meaningful engagement” with the FTSE 250 owner of the Sukari mine in Egypt.

Its move continues consolidation of gold miners, including last year’s £5billion takeover of FTSE 100 firm Randgold Resources by Canada’s Barrick Gold.

West Africa-focused Endeavour claimed a deal provides a “compelling value creation opportunity”.

Its chief executive, Sebastien de Montessus, said: “We believe Centamin’s shareholders are currently disadvantaged by the Sukari mine being managed within a singleasset 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.”

Under its all-share proposal, Endeavour shareholders would own about 52.9 per cent, with Centamin investors holding 47.1 per cent. The combined group would have gold production of 1.2 million ounces.

Centamin announced in October that its boss, Andrew Pardey, would be retiring, while flagging lower than expected production at Sukari and “significant changes” to the operational team.

Its board unanimously rejected Endeavour’s proposal, arguing that the terms provide comparatively greater benefit to Endeavour’s shareholders and “do not adequately reflect the contribution that Centamin would make to the merged entity”. Centamin shares rose 16½p to 128¾p.