Barrick acquiring Randgold won't significantly affect fair value estimate

Mark Bristow as CEO, addition of good mines and unique merger structure are positives, Morningstar analysts believe.

Ruth Saldanha 25 September, 2018 | 9:00PM

On Sept. 24, Toronto-based  Barrick Gold (ABX), the world's largest gold producer, agreed to acquire Jersey-based Randgold Resources, creating a company that will have a market capitalization of over US$18 billion.

The deal is one of the most unique transactions in gold mining. The offer is all equity, with each Randgold share entitled to 6.128 new Barrick shares. The exchange rate is based purely on recent trading history and contains no premium for Randgold shareholders.

Once the merger is complete, Barrick will own approximately 66.6% of the new group, while Randgold will own approximately 33.4%, on a fully-diluted basis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Agnico Eagle Mines Ltd106.18 CAD1.34
Barrick Gold Corp35.80 CAD0.87

About Author

Ruth Saldanha

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca

 

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