I Can Tell You Rock

Centamin rejected Endeavour's takeover bid

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What's going on?

Now we aint sayin Centamins a gold digger but the British miner aint messin with no $1.9 billion takeover offer from Canadian rival Endeavour, it emerged on Tuesday. Get down, girl (go ‘head, tweet this).

What does this mean?

Endeavour and Centamin both operate gold mines in Africa. Endeavour currently focuses on West Africa, but Centamins got somethin that it needs to have: the only way in to a rich Egyptian gold deposit.



Endeavour tried to give Centamin money, but it took too much to touch her: Centamins board thinks the proposed deal undervalues the company. Still, its got that ambition, baby. On Tuesday Endeavour made the offer public, hoping Centamins shareholders would dig its bid valuing the company 13% above its share price on Monday and pressure the board to change its mind. Centamins stock then soared above the bid price suggesting investors are also holding out for more. Better be paid

Why should I care?

The bigger picture: You got needs.

Gold chains are in fashion in Canada: Kirkland Lake Gold paid $3.7 billion for a linkup with Detour Gold last week, and on Monday Chinas Zijin Mining Group bought Continental Gold for $1 billion. As global reserves of the precious metal dwindle and extraction costs grow, mining companies have turned to acquisitions to boost profits. For investors, consolidation also offers diversification: Tuesdays mooted deal would make Centamins shareholders less reliant on the success of just one big working mine.



For markets: A triflin friend indeed.

After rallying earlier this year in response to fears of an economic slowdown, golds price fell dramatically in November. Gold is a safe haven investment: it tends to do well when markets are jittery, but in recent weeks investors have grown more comfortable taking on risk. Still, any re-emergence of trade tensions and fears of an economic slowdown could cause the gold price to rebound which would stop gold diggers going broke, broke…

Originally posted as part of the Finimize daily email.

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