Acacia Mining criticises Barrick Gold takeover plans

Image: Acacia Mining

Acacia Mining has offered a barbed response regarding Barrick Gold’s intention to purchase the remaining shares that it does not already own of the company.

The takeover target stated that it strongly disagreed with a number of matters set out in Barrick’s June 18 announcement regarding the plans.

Barrick offered 0.153 of its shares in return for each Acacia ordinary share, a valuation of $US787 million ($1.1 billion). 

The company already owns 64 per cent of Acacia, with plans in place to acquire the remaining 36 per cent to help quash an ongoing argument with the Tanzanian Government over unpaid taxes. 

Tanzania’s government charged three Acacia subsidiaries working in the east African country with 39 counts of money laundering and tax evasion in October 2018, to which Acacia denied any wrongdoing.

Acacia also accused Barrick of undermining its presence in Tanzania by uninvitedly intervening in the company’s negotiations with the country’s government.

The London-listed company, one of Tanzania’s largest gold producers, has three operations in place in the country: Bulyanhulu, Buzwagi and North Mara.

Bulyanhuliu is working at a reduced capacity, with underground operations in cessation since October 2017 due to an export ban.

The company stated that while it agreed that Barrick’s acquisition of the 36 per cent of share it does not own could be an “attractive solution” to these issues, it had to be done at a fair offer price that commanded the support of shareholders.

“Acacia believes the perception that Acacia has been the roadblock to the settlement has led to a material deterioration of Acacia’s operating position in Tanzania,” the company said.

“The company did not consent to Barrick’s signing of a set of framework documents between Barrick and the (Tanzanian Government) in October 2017, which have formed the basis of Barrick’s negotiations with the (Tanzanian Government) thereafter, and had not approved or commented on the terms set out in the those framework documents.”

In addition, Acacia said that Barrick’s claim that the $US787 million offer represented a 14.4 per cent premium on its closing price was misleading and overstated the value offered to shareholders.

The company has expressed a preference for ongoing negotiation with the Tanzanian Government in the absence of a superior offer by Barrick.

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