Acacia Jumps in London on $4 Billion Endeavour Merger Talks – by Thomas Biesheuvel and Thomas Seal (Bloomberg News – January 16, 2017)

Acacia Mining Plc jumped to the highest in almost two months after the gold miner confirmed it is in early-stage talks with rival Africa-focused producer Endeavour Mining Corp. about a possible merger of the two companies which have a combined value of about $4 billion.

Acacia, which mines the precious metal in Tanzania, rose 4 percent to close at 435 pence in London, the highest since Nov. 21, after earlier rising as much as 7.7 percent.

After the close of trading in London on Friday, Acacia said it was in “discussions regarding a possible combination” with Endeavour. Bloomberg News earlier reported that day the companies were exploring a merger, citing people familiar with the talks. Toronto-listed Endeavour confirmed on Friday it had held discussions with Acacia that “may or may not result in agreement of a transaction.”

“On the face of it this appears a sensible African-focused fit, with Endeavour’s longer term growth adding appeal to Acacia’s flat profile,” analysts from Investec Plc wrote in a note on Monday.

“The companies are ungeared and a merged company would be of a similar production scale to Randgold.” Randgold Resources Ltd. is the largest gold producer listed in London with a market value of about $7.7 billion.

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