Barrick Gold has made an offer to buy out the minority stake in Acacia Mining PLC (LON:ACA) to resolve the ongoing dispute with the Tanzanian government over unpaid taxes.
Tanzania has accused Acacia of owing billions of dollars in royalties on undeclared exports and has banned the gold miner from exporting gold and copper concentrates.
The Canadian giant has been negotiating with the Tanzanians over the issue but gold miner Acacia has been excluded from these talks.
Acacia is 64% owned by Barrick, but brokers still slammed the proposed all-share buy-out as a ‘very low ball’ offer.
Terms are 0.153 Barrick shares for every one of Acacia but Peel Hunt said it expected an offer of at least 0.225 while Shore Capital was also highly critical.
The indicated price values Acacia at around 146p per share, a discount of around 8% to last night’s close of 159.5p said Peel Hunt.
Shore Capital also noted that the proposal is also subject to conditions and “does not constitute an offer or impose any obligation on Barrick to make an offer”,
Barrick added it is the final stages of negotiating a settlement with the Tanzanian government.
A letter published from the Tanzanian government’s negotiating team stipulates that a deal cannot be agreed if Acacia is one of the counterparties and unless there are substantial changes to the management style of its three mines in the country - North Mara, Bulyanhulu and Buzwagi/Pangea Minerals.
Acacia has lost nearly three-quarters of its value since the row with the Tanzanians started.