Centamin shareholders might welcome another golden opportunity

Endeavour of Canada has abandoned efforts to take over Centamin, the UK’s biggest standalone listed gold miner.

It has walked away from its £1.5bn bid for the Egyptian group, blaming Centamin’s reluctance to agree to extend the bid deadline again and hand over the information it asked for.

In fact, Centamin — strong-armed by shareholders — did agree to extend the bid timetable to January 14. And it did swap information with Endeavour, just not enough to overcome the heavily indebted Canadian group’s difficulties in raising its offer.

It was always going to be tricky for the Canadian miner to win over Centamin’s investors with a bid representing a big discount to the UK group’s asset value. It became harder still after Centamin announced last week that it had extracted record amounts of high-grade gold in the fourth quarter, and last month recruited former fund manager Jim Rutherford to replace founder Josef El-Raghy as chairman next year. Investors like seeing one of their own on boards.

Even after Endeavour walked off on Tuesday, Centamin’s market capitalisation did not fall below £1.5bn, aided by it sugaring the pill with a hefty $6 per share final dividend.

Still, shareholders will grumble if the old production glitches re-emerge and Centamin’s all-in production costs — currently swelled by toppy salaries and expenses to more than $900/oz — don’t fall.

More broadly, investors are nervy about the risks in operating a single asset in one country. They want diversity. Consolidation is in the air. Any bidder brandishing an offer of 130p a share will get a hearing from investors, if not Centamin’s board.

kate.burgess@ft.com

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