Shares of Centamin PLC (GB:CEY) surged around 25% as of writing after the British mining company agreed to the takeover offer of South Africa-based AngloGold Ashanti (AU). The deal values Centamin at £1.9 billion ($2.5 billion) in a cash and equity offer. Following the news, Centamin shares reached 149p per share, marking its highest level in almost four years.
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If the deal proceeds, Centamin will become the latest mining company to exit London, marking a setback to the London stock market. The acquisition is dependent upon the approval of Centamin’s shareholders and regulatory authorities.
Centamin is a mining firm that specializes in gold exploration and development. Headquartered in Jersey, it operates in Egypt, Burkina Faso, and Côte d’Ivoire.
Centamin Accepts AngloGold Ashanti’s Takeover Offer
Centamin’s board accepted AngloGold Ashanti’s takeover offer, describing it as a “compelling strategic fit” that aligns well with AngloGold’s key strengths. With this takeover, AngloGold will gain control of Centamin’s flagship asset, the Sukari gold mine in Egypt, which will boost its operations in Africa.
According to the terms of the deal, AngloGold is offering 163p for each Centamin share. This reflects a 36.7% premium over Centamin’s closing price of 120p on Monday. Additionally, Centamin shareholders will receive 0.06983 of a new AngloGold share and $0.125 in cash for each Centamin share they hold.
After the deal is finalized, AngloGold shareholders are expected to hold approximately 83.6% of the expanded issued share capital of AngloGold Ashanti, while Centamin shareholders will own around 16.4%.
Centamin Unveils Trading Update
Along with the acquisition, Centamin unveiled its trading update for the first two months of the third quarter of 2024. Centamin generated $76 million in free cash flow in the first two months of Q3, marking a 77% jump from the $43 million in the first half of the year.
Meanwhile, the company reported gold production of 93,278 ounces for this period. Gold output for the first nine months reached 318,017 ounces. Moving ahead, the company maintained its gold production guidance for the current year in the range of 470,000 to 500,000 ounces.
Are Centamin Shares a Good Buy?
On TipRanks, CEY stock has been assigned a Strong Buy rating based on five recommendations. The Centamin share price target is 162.92p, which is 8.6% above the current trading level.
