Endeavour Mining Corporation and Centamin have agreed to conduct a reciprocal due diligence exercise to assess the feasibility of a merger, following a weekend meeting between Endeavour's CEO and Centamin's chairman, Endeavour said on Monday. “The objective of the due diligence exercise would be to allow both companies to further understand each other's assets,” Endeavour said in a statement. It would be “a critical precursor” to determining whether a deal could be agreed that was in the best interests of both companies' shareholders. As part of a flurry of M+A activity in the gold sector, Canada's Endeavour Mining Corp this month made a $1.9 billion all-stock takeover proposal for Africa-focused Centamin, which Centamin said at the time did not offer sufficient value. The move comes few weeks after Centamin told Ahram Online that it rejects business tycoon Naguib Sawiris backed takeover offer, arguing that Endeavour Mining Corporation, owned by Sawiris, is heavily in debt. "Tracking its position in the market, we found that Endeavour's fiscal position is very bad, as it is $750 million in debt, while Centamin has a sound fiscal situation and it does not have to accept any such deal, especially that Sawiris has frequently announced it over recent years and Centamin's response has always been to refuse his offers," Managing director and vice chairman of Centamin, PLC, the owner of El-Sokari Gold Mine in Egypt, Joseph El-Garhy, told Ahram Online earlier in December.
