Endeavour Mining is seeking to engage with Centamin with the intention of reaching an agreement on the terms of a recommended all-share merger between Endeavour and Centamin.
Endeavour believes that this potential combination would strongly benefit both sets of shareholders due to the compelling long-term value creation opportunity.
After several unsuccessful attempts to engage with the Board of Directors of Centamin, initially in October 2018 and then again on November 11, 2019 regarding the prospects for a merger, Endeavour then submitted a formal proposal to Centamin on November 25, 2019, regarding such combination.
As meaningful engagement has still not been forthcoming, Endeavour is announcing the terms set out in its Proposal in an effort to encourage the Centamin Board to engage in discussions.
Commenting on the announcement, Michael Beckett, Chairman of the Board of Directors of Endeavour, says:
“We firmly believe that the proposed combination between Endeavour and Centamin provides a compelling value creation opportunity for both sets of shareholders which is superior to what can be achieved by each company on a standalone basis.
“Despite repeated good faith attempts to engage with Centamin, our efforts have been frustrated by their refusal to entertain any discussions about a Merger before entering into a standstill agreement.
“A standstill would have the effect of precluding us from taking the Proposal to shareholders if the Proposal was not seriously considered by Centamin. We have therefore decided that, due to the strong merits of the Merger and its potential to create value, it is necessary to make public our proposal so that the voices of shareholders are heard.
“Our management team has demonstrated a disciplined approach to business development opportunities and the Endeavour Board will continue to be prudent allocators of capital to opportunities that it believes are aligned with its long-term strategic objectives, and that create value for shareholders.”
Sébastien de Montessus, President & CEO of Endeavour says:
“After having completed the turnaround of our asset portfolio, we are well-positioned to focus management efforts on a new phase in our growth strategy. We believe that the Centamin’s shareholders are currently disadvantaged by the Sukari mine being managed within a single-asset 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 that is managed with a long-term value focus and with La Mancha as a key cornerstone shareholder.
“Building on our operational track record, we believe that with the combined management team, we would be ideally positioned to improve the efficiency of Sukari and deliver stronger value to both sets of shareholders.”
In reply Centamin has stated:
"The Board of Centamin notes the announcement by Endeavour Mining regarding an unsolicited preliminary proposal for a potential all share combination of the company and Endeavour based on an exchange ratio of 0.0846 Endeavour shares for each Centamin share, implying a 5% premium based on the preceding 30-day VWAP of each company to 22 November 2019.
The Board of Centamin has reviewed the Proposal with its financial and legal advisers and believes, based on publicly available information on Endeavour, that the terms of the Proposal provide comparatively greater benefit to Endeavour's shareholders, do not adequately reflect the contribution that Centamin would make to the merged entity and that Centamin is better positioned to deliver shareholder returns than the combined entity.
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.