Zinger Key Points
- Barrick warns shareholders against TRC Capital’s mini-tender offer priced at a 4.5% market discount.
- The offer coincides with Mali’s gold seizure, risking $380M of gold and 14% of Barrick’s annual production capacity.
Barrick Gold Corporation GOLD has alerted shareholders about an unsolicited mini-tender offer from TRC Capital Investment.
What Happened: The offer seeks to purchase up to 5 million of Barrick's common shares, representing about 0.29% of the outstanding shares of the second-largest gold miner.
However, the firm made this offer well below the previous closing market price of CA$21.35 per share. The offer was at a discount of 4.52% to the closing price on the Toronto Stock Exchange and 4.38% to the closing price on the New York Stock Exchange (NYSE).
Barrick noted that it does not endorse the offer and recommends that shareholders refrain from tendering their shares.
The company also clarified that shareholders who have already tendered their shares could withdraw them by Feb. 6 by following the procedures outlined in TRC Capital’s documents.
Mini-tender offers like this are designed to avoid regulatory thresholds that trigger disclosure requirements under Canadian and U.S. securities laws. Regulators, including the U.S. Securities and Exchange Commission (SEC) and the Canadian Securities Administrators, have raised concerns about mini-tender offers, noting that they are often priced below market value.
The SEC has previously warned that some bidders use these offers to exploit shareholders who may not realize the offer price is significantly lower than the current market price.
See Also: Tuesday’s Producer Inflation Report Could Stoke Market Volatility As Fed Path Remains Unclear
Why It Matters: TRC Capital's timing coincides with Barrick's issues in Mali, where it operates the Loulo-Gounkoto mining complex. Reuters reported that the Malian government recently issued a provisional order to seize gold stocks at the site, with enforcement beginning on Jan. 11.
This dispute arises from Mali's government pushing to renegotiate mining contracts for a greater share of revenues amidst higher commodity prices. The broader trend in the region shows that military-led governments have sought to reassert control over natural resources.
Barrick has disclosed that around four metric tons of gold, worth approximately $380 million based on current prices, are at risk. Loulo-Gounkoto contributes around 14% of Barrick's total annual gold production, making it a critical asset for the company.
Price Watch: Barrick closed the trading session down 1.72% at $15.45 on the NYSE.
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