Centamin set to leave London stock market after takeover

Centamin is set to become the latest mining company to leave the London stock market after it agreed to a takeover from an American rival.
It has recommended a $2.5 billion cash-and-shares deal from AngloGold Ashanti as the New York-listed group seeks control of Egypt’s largest goldmine.
AngloGold, which also has a listing in Johannesburg, made an offer valuing the FTSE 250 group’s shares at 163p each, representing a 36.7 per cent premium to the closing share price on Monday. Shareholders in Centamin will receive 0.06983 new AngloGold shares for each Centamin share and an additional $0.125 in cash. Centamin’s shares closed up by 27½p, or 22.9 per cent, at 146.90p last night, valuing the company at £1.7 billion. ­AngloGold’s shares closed down $1.36, or 4.7 per cent, at $27.44 in New York on Tuesday night.
Centamin’s key asset is its Sukari goldmine in Egypt’s Eastern Desert, although it also had projects in the Ivory Coast. Sukari has produced more than 5.9 million ounces of gold since it began production in 2009 and James Rutherford, 65, the chairman of Centamin, said the deal was “an endorsement of Centamin’s achievement in re-establishing Sukari as a world-class operation”.
The London market was hit by the exits of several Russian goldminers after the invasion of Ukraine, while Randgold was delisted when it merged with Barrick Gold, of Canada, in a $18.3 billion all-share deal in 2018.
“The Centamin board believes that the strategic merits of the transaction are compelling and that the terms offer Centamin shareholders participation in the continued growth of our operations under the stewardship of AngloGold,” Rutherford said. Centamin’s shareholders will hold 16.4 per cent of the merged group. They will vote on the deal next month.
AngloGold, which has a market value of $11.3 billion, operate projects in Tanzania, the Democratic Republic of Congo, Ghana, Guinea, Australia, the United States, Brazil, Argentina and Colombia. The company said that the improved purchasing power of the combined group could help to reduce the cost of supplies for the Sukari mine, as well as other operating costs.
Centamin has been exploring other parts of the Eastern Desert in search of gold and AngloGold noted a “promising discovery” from drill-testing in a more central area of Egypt that has been dubbed “Little Sukari”.
In a joint statement, the companies said: “Little Sukari is geologically analogous to Sukari and, given its geographic proximity, can leverage the adjacent Sukari lease and plant operation.
“The transaction will support AngloGold’s ability to both return capital to shareholders and pursue greenfield and brownfield growth opportunities in Egypt and Ivory Coast, at AngloGold’s existing development initiatives in Nevada, Ghana and Colombia, along with other brownfield initiatives across the portfolio, delivering attractive returns to both sets of shareholders.”
Analysts at Morgan Stanley said that AngloGold’s shareholders may be surprised at the timing of the announcement as the company had struck a deal at a “an elevated point in the gold cycle”. They noted that the announcement did not outline any figures for possible cost savings of the combined group. Nevertheless, they said the valuation of Centamin was “fair for the current environment”.
Jochen Tilk, 60, the chairman of AngloGold, said: “Today’s transaction is highly compelling and builds on the strong foundation we have built. It adds to our portfolio the pre-eminent gold producer in Egypt and offers enormous geological potential that we are very well placed to develop.”
The mining sector has become an active target for dealmakers in recent years, with Glencore, the London-listed commodities group, bidding for control of Teck Resources, a Canadian rival, and BHP launching a takeover bid for Anglo American. Glencore ultimately took control of Teck’s steelmaking coal business and later abandoned plans to spin off its coal assets as they provided “cash-generating capacity” for shareholders.
Anglo American successfully defended itself from BHP’s £39 billion offer by promising a restructuring plan to develop its copper assets and to spin off its coal division, the South African-based Amplats platinum unit and De Beers, the diamonds business.