Acacia Mining rejects Barrick Gold’s takeover bid

par Jacques Leroueil

Following the advice of a party of its shareholders, who reject the terms of the offer, Acacia Mining’s management on Monday expressed its disagreement with the proposal made in late May by Barrick Gold, the company’s majority shareholder.

Discussed in May in our columns, Barrick Gold’s offer to buy Acacia Mining has some lead in the wing. In a statement issued on Monday, June 24, the mining company stated that it »[…] strongly disagrees with a number of points set out in Barrick’s announcement[…]. The subject of the dispute is not so much the repurchase proposal itself as the amount of the transaction. As a reminder, in its offer dated May 21, 2019, Barrick, which already holds 63.9% of the capital of Aacacia Mining, offered minority shareholders 0.153 Barrick shares in exchange for each of their Acacia shares, valuing the entire company at $787 million. Too little for interested parties: at 147 pence per share, Barrick’s offer is nearly 25% lower than Acacia Mining’s current stock market price (190 pence). Moreover, in its 2018 annual report, Canadian gold operator Barrick estimated Acacia’s assets at $1.3 billion. But after a further audit review in May, the company reversed this initial estimate and concluded that some of Acacia’s assumptions about its assets « were not justifiable ». However, Acacia still says it is open to negotiations. « Acacia continues to believe that, subject to a fair offer price […], Barrick’s acquisition of Acacia shares […] would be an attractive solution for key stakeholders, » explain the company’s management in their press release.

It remains to be seen what Barrick Gold’s reaction will be, as he has not yet communicated on this subject. Barrick Gold’s management, which has been working for several months to find common ground with the Tanzanian authorities, who accuse Acacia of having reduced its tax returns for many years and therefore no longer want to deal with the current management of the mining operator, offered to acquire in May the 35% of the firm’s capital that it did not yet own. A solution that would have allowed him to fully take over Acacia Mining’s activities in Tanzania, which is now at a standstill.