Barrick Gold has bowed to pressure from minority shareholders and increased its buyout offer for Acacia Mining.
The Canadian miner is now offering 0.168 of its shares, up from an early exchange ratio of 0.153. Based on the current Barrick share price, that values Acacia at about 232p a share, or £951m in total. Minority shareholders would receive total consideration of £343m, the companies said.
In addition, Acacia shareholders will be entitled to a special dividend from the sale of exploration assets. The value ascribed to the “assets” reflected in the exchange ratio amounts to just $10m, but the sale process could bring in more money.
Acacia, which recently claimed its shares were worth as much as 271p-281p a share, said it would recommend the offer. Barrick is trying to buy the 36.1 per cent of the company it does not already own but minority shareholders, including Odey Asset Management and Fidelity balked at its opening offer.
When Barrick proposed an offer in May, it was pitched at an 8 per cent discount to Acacia’s share price.
“We assume that the increased offer level will now be acceptable to the minority shareholders, and note that the Acacia directors have unanimously approved the acquisition,” said analysts at Berenberg.
Shares in Acacia rose 35.4p, or 19 per cent to 222p.
Barrick, which is led by Mark Bristow, has said the buyout is the only way to improve Acacia’s relations with the government of Tanzania following a two-year dispute that left the company unable to export gold ore from the country.
We’re not surprised to see an agreement reached, especially in light of the squeeze put on by the government of Tanzania in recent days,” said analysts at Numis.
Earlier this week, Tanzania ordered Acacia it to stop using a waste storage facility at its largest gold mine by Saturday, an act that could cripple operations.
The order by Tanzanian’s National Environment Management Council comes just days after Acacia was told its North Mara mine had to be investigated before it could export gold.