Acacia Mining has released a statement to say it “strongly disagrees with a number of matters” set out in parent company Barrick Gold’s takeover proposal published last week.
Acacia argued that the announcement “appears to have ignored the value of the portfolio of exploration and development assets, and the strategic value of the company’s pre-emption rights pursuant to the relationship agreement between Acacia and Barrick”.
The statement from Acacia suggested that, subject to a “fair” offer supported by shareholders, Barrick’s plans to acquire the shares it does not own (it currently holds 64%) would still be attractive to key stakeholders.
However, the largest gold producer in Tanzania, said it “strongly disagrees with Barrick’s view on Acacia’s life of mine plans, which it understands to underpin Barrick’s valuation and price of the Proposal, and sees no reasonable basis for Barrick’s proposed adjustments”.
In the wide-ranging statement the company added: “Acacia believes that Barrick’s intervention in Acacia’s negotiations with the Government of Tanzania (GoT), the length of time Barrick’s negotiations with the GoT have taken and the way they have managed their direct negotiations, have had the effect of undermining Acacia in Tanzania.
“Further, 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.”
Barrick’s buyout proposal values Acacia at around $787mn which it said reflected a premium of 14.4% to Acacia’s closing price on May 20. However, Acacia believes categorising the proposal as offering a “premium” is misleading and noted that Barrick’s assertion that minority shareholders would benefit from the upside were “overstated”.
Acacia advised: “In the absence of a recommendable offer from Barrick, Acacia’s preferred outcome is to continue to seek a negotiated settlement with the GoT (however negotiated), which would allow for the lifting of the export ban and resumption of full operations at Bulyanhulu, whilst continuing to operate at North Mara and Buzwagi in the ordinary course, and continuing to demonstrate its long-term commitment to Tanzania, its people and the mining industry going forward. Acacia remains hopeful of an amicable resolution to all disputes in the near-term.”