East Africa-focused Shanta Gold on Monday announced that it had ended takeover discussions with Shandong Gold Group and Chaarat Gold, sending the Aim-listed miner’s share price down 12%.
Shanta entered into negotiations with Shandong, Chaarat and Yintai Gold in October. Yintai previously withdrew its interest in making an offer for the company.
Shanta said in a statement that it continued to believe that “sensible consolidation” in the junior sector could be beneficial in managing risk and optimising allocation of capital, but that it would not accept an offer or deal structure that did not deliver value for shareholders.
“After further engagement and having taken advice from its financial advisers, the board has concluded that there is no merit in continuing discussions with Shandong and Chaarat, which both parties have accepted,” the firm stated.
Chaarat also seperately confirmed that it no longer intended to make an offer for Shanta, which owns the New Luika gold mine, in Tanzania, and the West Kenya project, in Kenya.
"Management teams of Shanta and Chaarat have been engaged to evaluate the potential structure and terms of a possible offer, however it has not been possible to reach an agreement. Chaarat will continue to proactively seek and evaluate various opportunities to diversify its asset portfolio and grow inorganically, as well as pursuing organic growth through Chaarat's own significant resource base," Chaarat said.
Shanta's stock fell to 9.43p a share on Monday.