Barrick says Acacia proposal reflects 'fair value' following Tanzania talks
Barrick Gold Corporation provided an update in relation to Acacia. Barrick met today with the Directors and senior management of Acacia and presented a proposal to acquire all of the shares it does not already own in Acacia through a share for share exchange of 0.153 Barrick shares for each ordinary share of Acacia. The Proposal assumes that no further dividends will be paid by Acacia following the date of the Proposal. The exchange ratio is based on the 20-day volume weighted average trading prices of Acacia and Barrick as at market close in London and New York on 20 May 2019. This implies a value for Acacia of $787M and total consideration to the minority shareholders of Acacia of $285M. Barrick has been negotiating with the Government of Tanzania for the last two years to seek a basis for a settlement of Acacia's ongoing disputes with the GoT and to establish a viable framework under which Acacia could resume its full operations in Tanzania and rebuild its relationships with the GoT. While a basis for a settlement has been developed but not finalized, in meetings this past weekend, the GoT stated that it is not prepared to enter into a settlement directly with Acacia. As a consequence of the negotiations with the GoT, Barrick has had the opportunity to undertake detailed due diligence on the Acacia assets and on the basis of this work has concluded that the Proposal reflects the fair value of the company. Since the Proposal is in Barrick shares, the Acacia minority shareholders will be able to benefit from any future potential upside in both the Acacia assets and Barrick's broader portfolio of assets.