iversified mining group Eurasian Natural Resources (LSE: ENRC) agreed to acquire Central African mining and Exploration Co (CAMEC) (AIM: CFM) in a £584 million cash-only deal.
The offer of 20 pence per share for the entire issued and to be issued ordinary share capital of CAMEC represents a 67% premium to its price on 15 July this year, the day before CAMEC said it had received a preliminary approach which may or may not lead to an offer.
The acquisition, which is pending on shareholder approval, would give ENRC access to CAMEC’s copper/cobalt resources in the Democratic Republic of Congo, thus providing entry into copper, which ENRC said had “attractive fundamentals.”
“The attractive assets of CAMEC fit well with our strategic ambition to grow and diversify ENRC. CAMEC offers all of our key requirements including scale and scalable assets, low cost and extensive growth opportunities. We firmly believe that CAMEC offers value accretion for all shareholders,” said ENRC Chief Executive Felix Vilus.
CAMEC reported profits of £54 million for the year ended 31 March 2008, possessing £800 million worth of assets with cash reserves of £17.8 million.
The company’s directors unanimously recommended the shareholders to accept the offer, saying the valuation was fair and that ENRC’s financial and operational resources would help CAMEC develop its asset portfolio.
The announcement helped ENRC to a 1.8% climb on the London Stock Exchange, while CAMEC rallied 7.5%
Sunday 20 September 2009
ENRC agrees to buy CAMEC for £584 million in effort to diversify
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