Naguib Sawiris, the Egyptian billionaire founder of Orascom Telecom Holding SAE, plans to add gold to his investments after agreeing to buy Canada’s La Mancha Resources Inc. for about C$500 million ($493 million).
Sawiris’ Weather Investments II SARL will pay C$3.50 a share for La Mancha, the Montreal-based company said today in a statement. That’s 45 percent more than La Mancha’s 20-day average price before today and compares with the 50 percent average premium in gold takeovers valued $100 million or more announced this year, according to data compiled by Bloomberg.
“It’s a 13 percent discount to La Mancha’s 52-week high, which is pretty decent in this market,” Nicholas Campbell, a Vancouver-based analyst at Canaccord Genuity Corp., said in a telephone interview. “It’s a good price and it’s in cash too.”
As well as telecommunications, the Sawiris family has interests in construction, fertilizers, cement, real estate and hotel development, La Mancha said. Buying the Canadian company will give Sawiris gold mines in Africa and Australia.
La Mancha rose 52 percent to C$3.42 at the close in Toronto. The shares fell 18 percent this year before today.
La Mancha said it put itself up for sale at the request its majority shareholder Cie. Francaise de Mines et Metaux, a unit of French nuclear company Areva SA, which has agreed to tender its 63 percent stake to Weather.
La Mancha is being advised by BMO Capital Markets and law firm Fasken Martineau DuMoulin LLP. Areva’s financial adviser is Deutsche Bank AG and its legal counsel is Blakes. Weather is being advised by Societe Generale SA and Norton Rose LLP.
The value of the deal is based on the 142.7 million shares of La Mancha that were outstanding at June 29, according to data compiled by Bloomberg.