Managing director and vice chairman of Centamin, PLC, the owner of El-Sokari Gold Mine in Egypt, Josef El-Raghy, has revealed that Centamin has not received an official offer from businessman Naguib Sawiris — the owner of Endeavour Mining Corporation — to purchase shares in Centamin or to acquire El-Sokari mine.
Speaking to Ahram Online, El-Raghy said he was surprised by a recent announcement made by Sawiris, especially that it came through his company's website and not through any official offer. It was reported that Endeavour proposed a $1.9 billion all-stock takeover of Centamin. El-Raghy said Centamin has sent a letter to the Egyptian Stock Exchange (EGX) Wednesday to register its refusal of the proposal, clarifying how it would harm Centamin shareholders.
"Tracking its position in the market, we found that Endeavour's fiscal position is very bad, as it is $750 million in debt, while Centamin has a sound fiscal situation and it does not have to accept any such deal, especially that Sawiris has frequently announced it over recent years and Centamin's response has always been to refuse his offers," according to El-Raghy.
El-Raghy added that the latest announced proposal was reviewed by Centamin's board and its financial and legal advisers who believe, based on publicly available information on Endeavour, that the terms of the proposal provide comparatively greater benefit to Endeavour's shareholders, while they do not adequately reflect the contribution that Centamin would make to any merged entity and that Centamin is better positioned to deliver shareholder returns than the proposed combined entity. As a result, the board unanimously rejected the proposal.
According to the offer announced earlier this week by Endeavour, the company is seeking to gain control of Centamin assets that include El-Sokari mine and the Cleopatra project in Egypt, as well as exploration projects in West Africa. Endeavour said it planned to offer 0.0846 of its own shares for each Centamin share, worth about 126.27 pence per share.
The Toronto-listed firm, which owns four West African mines, said Centamin had refused several attempts to engage in talks.
In August, Sawiris announced his intention to invest in gold and copper mining in Egypt in light of a new mining law recently approved.
"We’re looking at investing in mining in Egypt because we invest in mining around the world. They’re changing the mining law here and we hope to be investors here too,” Sawiris told Reuters prevously.
“We’re waiting for the details of the law. They issue a law and then the devil is in the details. Once this is done, we intend to look for gold and copper,” he added.