07:14 AM EST, 11/16/2020 (MT Newswires) -- Endeavour Mining Corp. (EDV.TO), which gained 1.8% last Friday, said Monday that it entered into a definitive agreement to acquire Teranga Gold Corp. (TGZ.TO), which lost 1.4% last Friday, to create a top 10 senior gold producer after recently flagging that they were in talks about a merger.
Under the terms, Teranga shares will be exchanged at a ratio of 0.470 of an Endeavour share for each Teranga share, implying a 5.1% premium on the companies' respective Nov. 13 closing price and a 9.4% premium on their 20-day volume-weighted average price.
The combined company will be owned 66% by existing Endeavour shareholders and 34% by existing Teranga shareholders, on a fully diluted in-the-money basis. Closing is expected in the first quarter of 2021.
Endeavour owns six mines across Burkina Faso and Ivory Coast while Teranga has assets in Senegal, Burkina Faso and Ivory Coast.
Top Endeavour shareholder La Mancha Holding committed to invest US$200 million in support of the merger. Upon completion of the merger and its investment, La Mancha's stake will drop from 24% in Endeavour to 19% in the combined company.
Barrick Gold Corp. (ABX.TO) and Tablo Corp., which hold a combined 33% stake in Teranga, also support the merger. The boards of Endeavour and Teranga recommend shareholders vote in favor of the transaction.
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