December 10, 2019

#Gold #Mining Companies’ M&A Disparity




 Recent deal metrics on average value reserves at ~US$260/oz and production at ~US$3,900/oz. For takeovers the average bid premium is 24%, with Barrick+Randgold's zero percent premium model not lasting.

Most of the M&A activity in the last six months has been focussed on individual asset divestments from the majors

From GMR:

One thing that strikes GMR about the flurry of recent M&A in the gold sector is it highlights a disparity between the market (gold equities are drifting lower) and acquisitive company boards encouraged by a robust gold price. The risk is some boards/management may feel they have missed out or have been leapfrogged by peers, further driving M&A activity into 2020. GMR feels a bad sense of déjà vu.... or is it just us?

 

 

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