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Britain’s Endeavour Mining Corp. is buying Teranga Gold Corp. in an all-stock transaction worth about $2.44-billion, the latest in a whirlwind of deal making in the global gold sector over the past two years aimed at winning back generalist investors.
London-based Endeavour is paying 0.470 of its shares for each Teranga share, a 5.1-per-cent premium to Teranga’s closing share price last Friday. Endeavour’s biggest shareholder, Egyptian billionaire Naguib Sawiris, has pledged to invest an additional $200-million into the combined company to strengthen the balance sheet as part of the transaction.
Endeavour has six mines in Burkina Faso and Côte d’Ivoire, while Toronto-based Teranga has two mines in Senegal and Burkina Faso. The transaction will see Endeavour distance itself from B2Gold Corp. and Kinross Gold Corp. as West Africa’s biggest gold miner by production, with projected yearly output of 1.5 million ounces.
Endeavour, which trades on the Toronto Stock Exchange, is planning to list the combined company in a secondary listing on the London Stock Exchange, and hopes to gain an inclusion in the FTSE 100, which would bring added demand through index purchases by mutual funds.
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