Skip to main content

The Globe and Mail

La Mancha shares surge on Sawiris takeover offer

Naguib Sawiris

Deborah Baic/Deborah Baic/The Globe and Mail

La Mancha Resources Inc. shares gained 52 per cent after a firm run by an Egyptian billionaire offered to buy the gold miner for $499.5-million.

The Montreal-based miner said Friday that the investment company Weather Investments II, owned by Naguib Sawiris, founder of Orascom Telecom Holding, has offered $3.50 per share in cash for La Mancha.

The offer was a 55.6 per cent premium to the company's closing price Thursday on the Toronto Stock Exchange.

Story continues below advertisement

After the offer was announced, La Mancha's shares jumped $1.18 to $3.43, still slightly lower than the offer price.

"While offering a significant premium to our shareholders, this transaction will enable the La Mancha team to pursue the development of its projects with its partners in Sudan, Côte d'Ivoire and Australia with the support of a strong financial partner," said Dominique Delorme, president and CEO of La Mancha.

"We are delighted by the show of confidence expressed by Weather II through this transaction and are looking forward to put our operating and development expertise at their service".

La Mancha announced in March that it had formed a special committee of independent directors to conduct an auction seeking acquisition proposals.

La Mancha's board has unanimously agreed to recommend the offer to shareholders.

The company has two gold mines in Africa and two more in Australia.

Egypt's Sawiris family also has interests in the telecom, construction and fertilizers, cement, real estate and hotel development industries. Orascom holds a substantial stake in Canadian wireless firm Wind Mobile.

Story continues below advertisement

Mr. Sawiris, chairman and CEO of Weather II, said La Mancha is an extremely attractive company with a geographically diverse portfolio with exposure to growth and development-stage projects.

"We look forward to working with the strong management team to realize the full potential of the company going forward."

La Mancha's largest shareholder, Compagnie Française de Mines et Metaux, which requested the auction the process, said it plans to tender all of its shares to Weather, representing 62.8 per cent of outstanding shares.

Under a lock-up agreement the shareholder cannot tender its shares to a competitor.

La Mancha cannot solicit other offers other offers under terms of the deal and would face a break fee of $15-million if the acquisition isn't completed.

Report an error Licensing Options
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Globe Newsletters

Get a summary of news of the day

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.