Gold miner shines af­ter re­buff­ing £1.5bn merger

Scottish Daily Mail - - City&finance - by Francesca Washtell

BOSSES at Cen­tamin have snubbed a £1.5bn merger bid from Canada’s En­deav­our Min­ing, as the lat­est wave of deal-mak­ing in the gold in­dus­try reached Lon­don.

In its re­but­tal, Cen­tamin’s board said the terms of the of­fer un­der­val­ued the mid-cap miner and that En­deav­our would ben­e­fit more from the tie-up.

Cen­tamin’s in­vestors would have owned 47.1pc of the new en­tity, while En­deav­our’s would have 52.9pc. But an­a­lysts saw po­ten­tial, with Peel Hunt say­ing the tim­ing was right and there was a good com­bined busi­ness model on of­fer.

With just a sin­gle main project – the Sukari gold mine in Egypt – Cen­tamin is seen as a bit of a onet­rick pony. De­spite be­ing high-qual­ity, Sukari is strug­gling with slug­gish pro­duc­tion.

Cen­tamin is also ex­plor­ing for gold in Ivory Coast and Burk­ina Faso – two of the three coun­tries, in­ci­den­tally, in which En­deav­our has a pres­ence. The third is Mali.

En­deav­our must for­mally make an of­fer, or an­nounce it is not mak­ing one, by the end of De­cem­ber.

Cen­tamin rock­eted 14.8pc, or 16.6p, to 128.8p, ahead of the 126p per share bid, sug­gest­ing the City is gear­ing up for a sweet­ened bid or hos­tile takeover.

Fin­ncap an­a­lyst Martin Potts said the bid could have wider reper­cus­sions and pave the way for a cut-price over­seas takeover of strug­gling York­shire fer­tiliser miner Sir­ius Min­er­als, which yes­ter­day fell 1.3pc, or 0.04p, to 3.43p.

Fel­low gold min­ers Fres­nillo – up 2pc, or 11.2p, to 582.6p – and Poly­metal – 1.8pc higher, or 21.5p, to 1192p – were the top Foot­sie ris­ers as off­hand re­marks made by US Pres­i­dent Don­ald Trump about not hav­ing a dead­line for a trade deal with China sent mar­kets tum­bling world­wide, with in­vestors tak­ing refuge in the tra­di­tional safe haven of gold.

The FTSE 100 dropped 1.7pc by the close, down 127.18 points, to 7158.76, while the FTSE 250 fell 0.9pc, or 199.28 points, to 20,500.93.

Also reel­ing from Trump’s re­marks was steel­maker Evraz, which fell 7.4pc, or 27.7p, to 345.4p, af­ter he slapped tar­iffs on Brazil and Ar­gentina’s steel in­dus­tries on Mon­day. And Burberry trailed a fall in Euro­pean lux­ury stocks, clos­ing 1.8pc lower, or 35p, at 1970p, af­ter Trump threat­ened 100pc tar­iffs on French goods such as champagne.

At plumb­ing and heat­ing provider Fer­gu­son, prof­its jumped 9pc to £347m be­tween Au­gust and Oc­to­ber, buoyed by growth in the US. It said plans to sep­a­rate off its UK busi­ness, which is known as Wolse­ley, are on track. It fell 2.8pc, or 184p, to 6474p.

East Euro­pean air­line Wizz Air slid 0.6pc, or 22p, to 3927p, un­moved by a 24pc surge in pas­sen­gers it car­ried in Novem­ber com­pared with last year. Almost 3m peo­ple flew with Wizz, as it added 11 routes. Prop­erty com­pany Newriver

REIT ad­vanced 0.4pc, or 0.8p, to 189.2p, af­ter it bought Bravo Inns, a pub group mainly based in the North West, for £17.9m.

Fash­ion firm Ted Baker rose 5.8pc, or 21.2p, to 387.2p, bounc­ing most of the way back from a plunge on Mon­day when it re­vealed a £25m balance sheet blun­der.

The pound rose 0.5pc to $1.30 af­ter a poll from Kan­tar showed that the Con­ser­va­tives boosted their lead over the Labour Party dur­ing the past week. It es­ti­mated Tory sup­port hit 44pc, while Labour’s was at 32pc.

This weighed on ex­port-re­liant stocks such as drinks gi­ant Di­a­geo, which fell 0.2pc, or 6.5p, to 3117.5p, and un­did any gains from an up­grade from RBC an­a­lysts.

WH Smith also fin­ished in the red – down 2.2pc, or 54p, at 2374p – even though Peel Hunt an­a­lysts heaped it with praise, say­ing the re­tailer was un­der­val­ued.

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