Egyptian Petroleum Minister Tarek El-Molla said on Wednesday that Egypt welcomed Endeavour Mining’s bid to takeover Centamin Plc, saying it would encourage foreign investment in the country’s mining industry.
On Tuesday, Endeavour announced an all-share merger with Centamin, where the latter is valued at $1.9bn. However, Centamin rejected the $1.9bn all-stock takeover proposal, saying it did not offer enough value to its shareholders.
El-Molla added on Wednesday that the government had no role in the bid, yet they welcome any new investment in the gold and mineral exploration sector.
He explained that Endeavour’s bid would “give a positive message about the desire of an international company to be present in Egypt and will encourage other companies to come to Egypt.”
Endeavour proposed an exchange ratio of 0.0846 in Endeavour shares to each Centamin share.
Centamin is the operator of Egypt’s Sukari mine. It began production in 2009 and is considered to be the first large scale modern gold mine in Egypt and is located in the south-eastern region of the Eastern Desert. It is jointly owned by Centamin and the Egyptian Mineral Resources Authority on a 50% equal basis.
Also on Tuesday, La Mancha Holding’s – Endeavour Mining’s largest shareholder – Chairperson, Naguib Sawiris urged Centamin to accept the proposal. Adding that “We believe in the strategic rationale for this proposal and are fully supportive. Moreover, we can add significant value in Egypt, which is opening up its mining sector through a new, more supportive mining code, and increase the potential for further expansion in the country.”