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Barrick Gold given extension on Acacia Mining offer

By Michele Maatouk

Date: Tuesday 18 Jun 2019

Barrick Gold given extension on Acacia Mining offer

(Sharecast News) - Barrick Gold has been given more time to either announce a firm offer for Acacia Mining or walk away.
The company, which originally had until the end of play on Tuesday, now has until 1700 BST on 9 July to consider its options.

Acacia announced back in May that it had received an indicative proposal from Barrick about a possible offer for the remaining shares in the company that it does not already own. It said at the time that the consideration would be in the form of new common shares in Barrick, with Acacia shareholders receiving 0.153 of a new common share of Barrick for each of their ordinary shares.

Broker Peel Hunt said in a note after the announcement that the offer was "low ball" and "opportunistic".

"It is smart, but we do not think it will not be accepted by the Acacia shareholders," it said.

It said that Acacia operations alone without a resolution with the Government of Tanzania were worth 186p or 0.195 equivalent ABX shares, which is 27% higher than the ABX proposal on its estimates. With a resolution, the shares are worth at least 215p or 0.225 equivalent ABX shares, which is a 47% premium to the ABX proposal on Peel's estimates.

Meanwhile, Berenberg said in a note on Tuesday that the indicative offer, which implies a 173p a share valuation, sits well below its new 224p price target and at the low end of its 158p to 245p valuation range.

The bank, which upped its stance on Acacia shares to 'hold' from 'sell', said the indicative offer appears "opportunistic" and came soon after Barrick announced that it was nearing a settlement with the government of Tanzania.

"We therefore question the fairness of the offer at a time when Barrick is the only shareholder with the ability to assess the fair value of the company," it said.

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