Orbis agrees to takeover from Canadian miner SEMAFO

CANADIAN miner SEMAFO will take over explorer Orbis Gold after the Australian company’s board agreed to a revised offer.

CANADIAN miner SEMAFO will take over explorer Orbis Gold after the Australian company’s board agreed to a revised offer, pushing its shares more than 14 per cent higher.

SEMAFO will pay 71.3c per Orbis share, up from its previous unsolicited bid of 65c. The offer is at a premium of 15 per cent to Orbis’s previous closing price of 62c, and more than double the price in October when the first bid was made. The bid values Orbis Gold at $178m.

Orbis’s board unanimously recommended the offer to shareholders, and the takeover is likely to sail through after other shareholders holding 62 per cent of the Orbis Gold equity indicated their intention to accept the offer, the two companies said in a statement.

As part of the deal, SEMAFO will provide Orbis with $17.4m in funding through a short-term loan. The offer will close on February 20.

West African-focused Orbis’s key asset includes the underdevelopment Natougou Project in Burkina Faso. Toronto Stock Exchange-listed SEMAFO operates the nearby Mana mine in the West African country.

The takeover is the latest in a clutch of deals among small and mid-size gold explorers as weak gold prices and lack of funding for projects put pressure on such companies to merge.

Prashant Mehra