Centerra Gold Inc. says it didn’t respond to a recent $2-billion takeover proposal by a little known London Stock Exchange-listed mining concern, citing doubts about the company’s ability to complete such a deal.
It was the second time that Chaarat Gold Holdings Ltd., a small gold exploration and development company that operates in the Kyrgyz Republic, approached the Toronto-based gold miner this year.
In April, Centerra rejected Chaarat’s informal proposal to buy Centerra’s flagship Kumtor mine in the Kyrgyzstan for US$800-million, a transaction analysts dismissed as too low.
On Wednesday, Chaarat said in a news release it had made another approach in September with the objective of buying Centerra outright with an all-cash proposal valued 35 per cent above Centerra’s stock price at the time. It would be highly unusual for a company not to respond to such a rich premium offer.
“Absolutely, we looked at their proposal,” said Scott Perry, chief executive of Centerra, in a conference call with analysts discussing its latest quarterly financial results on Wednesday. “We’ve got a fiduciary responsibility to do so.”
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