ACACIA Mining share, cross listed on the Dar es Salaam Stock Exchange (DSE), gained by 2.93 per cent last week amid reports of the Barrick Gold offer to buy the remaining 35 per cent of Acacia Mining.
The DSE daily market report shows that on Friday last week Acacia share gained 1.32 per cent to close at 4,560/- compared to 4,500/- of the previous session.
The weekly financial markets Synopsis said in its report that Acacia’s price is on the crossroad after Barrick, the majority owner of the largest mining operator in Tanzania, announced an indicative takeover offer for Acacia.
A more than 10 per cent discount to Acacia’s market value and approximated 42 per cent discount below Barrick’s own audited valuation of Acacia’s assets relative to its 2018 annual report.
Barrick’s indicative offer is an attempt to sway a deal with the Tanzanian government which has numerous complaints about Acacia’s operations including tax evasion, extortion and misleading the government on mineral content of the firm’s exports.
The government of Tanzania has so far rejected to settle directly with Acacia. Barrick owns 63.9 per cent of Acacia’s stake, and the indicative offer is a move to fully own the mining firm and set new ground rules and terms of operations with the government of Tanzania going forward, including full compliance of mining laws and regulations of the land. Barrick, one of the world’s biggest gold producers, is offering 0.1533 of its shares for every Acacia share.
The proposal values London-listed Acacia at $787m and minority shareholders are being offered roughly 147p share, against a closing price on Tuesday of 159p.
Other cross listed counters’ price rally included Kenya Airways (DSE: KA) which gained 14.29 per cent followed by KCB Bank (DSE: KCB) which went up 6.67 per cent and National Media Group (DSE: NMG) gained 1.22 per cent.
Jubilee Holdings (DSE: JHL) and East African Breweries (DSE: EABL), were the week’s losers after prices dropped by 1.4 per cent and 0.85 per cent respectively while Uchumi Supermarkets (DSE: USL), remained constant.