Zijin Mining Acquisition of Continental Gold: Seeking Value Through Acquisition

Materials, IPO & Equity Analyst

Venkat Ramana Nandyal

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/endeavour-mining-corp" target="_blank" data-smartkarma-citation="entities:25621:1" rel="noopener">Endeavour Mining (EDV CN)</a> made a hostile bid for <a href="https://www.smartkarma.com/entities/centamin-plc" target="_blank" data-smartkarma-citation="entities:21870:1" rel="noopener">Centamin PLC (CEY LN)</a> in an all-stock proposal of £1.47B or US$1.9B. The offer of 0.0846 shares of Endeavour for every share of CEY or 126.27 GBp/share is a 13% premium to Centamin’s last close price of 112.20 GBp/share. Centamin’s board has rejected tender as it was not offering enough value to its shareholders. </p><p>We believe that EDV’s offer for CEY is opportunistic and the shareholders of CEY should wait for better terms as the present offer is just a 5% premium on the last 3 months' average price.  CEY is trading at 4.6x FY20 EBITDA, 1.5x book and below its peers on EV/oz of gold resources.</p>

Endeavour Mining (EDV CN) made a hostile bid for Centamin PLC (CEY LN) in an all-stock proposal of £1.47B or US$1.9B. The offer of 0.0846 shares of Endeavour for every share of CEY or 126.27 GBp/share is a 13% premium to Centamin’s last close price of 112.20 GBp/share. Centamin’s board has rejected tender as it was not offering enough value to its shareholders. We believe that EDV’s offer for CEY is opportunistic and the shareholders of CEY should wait for better terms as the present offer is just a 5% premium on the last 3 months' average price.  CEY is trading at 4.6x FY20 EBITDA, 1.5x book and below its peers on EV/oz of gold resources.

Endeavour Bid for Centamin Gold: An Opportunistic Bid