Zero-Premium Mergers Becoming the New Normal Among Gold Miners – by Aoyon Ashraf (Bloomberg News – June 10, 2020)

https://www.bloomberg.com/

Gone are the days of paying high premiums to acquire mining companies or assets.

After going through a prolonged bear market since 2013, miners have become more composed, and in this new bullish gold cycle paying a zero premium to merge two companies may become the new normal.

Deal-making among gold miners has picked up since the precious metal’s latest rally began in mid-to-late 2018. However, unlike in past bull markets, miners have been more careful to do deals that consolidate assets to minimize costs and maximize shareholder returns.

Recent mergers of equals — with no premium paid by the buyer — suggest there isn’t a need for hundreds of different companies with multiple assets and management teams, said Dan Barnholden, PI Financial’s managing director and co-head of investment banking.

Shareholders will applaud deals where executives put together very similar assets and cut corporate overhead, while creating bigger companies with increased liquidity, he said.

For the rest of this article: https://www.bloomberg.com/news/articles/2020-06-10/zero-premium-mergers-becoming-the-new-normal-among-gold-miners?utm_source=google&utm_medium=bd&cmpId=google

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