Acacia agrees to buyout from parent Barrick

Darnell Taylor
July 21, 2019

Shares in Acacia soared 19% to 222p as Barrick, the world's second biggest gold miner, struck a deal to buy the 36% of Acacia it doesn't already own in a deal that values the overall business at £951m.

The original buyout proposal from Barrick, which owns 63.9% of Acacia, drew accusations from minority shareholders that Barrick was taking advantage of the Tanzania-focused company's woes to buy it on the cheap.

Under the terms of the improved, Acacia shareholders would receive 0.168 new Barrick shares for each Acacia share, about 10% more than Barrick's initial offer of 0.153 Barrick share for one Acacia share.

However, a few months ago, Barrick said that Tanzania wouldn't consider any deal if Acacia remained as a counterparty.

"We think it's a good deal for all stakeholders", Geleta said the agreement represented a 53.5 per cent premium to Acacia's share price at the time of Barrick's indicative offer in May, as well as a 24.3 per cent premium to Acacia's closing price on Thursday.

The companies also announced that Barrick would sell Acacia's exploration properties over the next two years, with net proceeds to be paid to Acacia shareholders.

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"Though in the end, Barrick needed to increase its offer, this deal should allow Acacia to begin operating fully", analysts at Credit Suisse wrote in a note.

Barrick chief executive Mark Bristow has previously criticised others in the mining industry for offering large premiums in company takeovers.

Barrick has been negotiating with the government since the dispute began, and in late 2017 reached a proposed settlement that would include a US$300 million payout as well as future 50-50 profit sharing from Acacia's three mines in the country.

"We commend the two parties for the mutual agreement", a spokesperson with the Tanzanian government tweeted on Friday.

Earlier this month, Tanzania banned Acacia from shipping gold out of its North Mara mine, pending a site inspection.

"We will eagerly wait for official communication from Barrick to chart the way forward".

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