ENRC lands Camec with £584m bid

Eurasian Natural Resources Corporation (ENRC), the London-based Kazakh miner, confirmed yesterday that it has agreed to buy Camec, the Aim-listed African resources group, for as much as £584m.

ENRC has come under pressure from shareholders to explain what it intends to do with $2bn of cash it has in reserves. The group refused to rule out further takeovers or joint ventures in the future. However, chief executive Felix Vulis refused to comment on an announcement made by another Aim-listed miner, Frank Timis’s African Minerals, that ENRC was in negotiations with the group about a joint venture in Sierra Leone, calling it “rumour and speculation.” African Minerals announced to the Stock Exchange on Thursday that the two companies were in “advanced” discussions.

Yesterday’s deal gives ENRC access to Camec, or Central African Mining and Exploration Corporation’s, copper and cobalt assets in the Democratic Republic of Congo (DRC), as well as other interests in Mozambique, Mali and Zimbabwe. Mr Vulis said the group would keep much of Camec’s operational structure in place, but would move to install a new chief executive.

Camec was founded and run by former England test cricketer Phil Edmonds, who has a number of other African interests. ENRC has already secured 55.2 per cent of Camec shares, and has bought all the shares owned by Dan Gertler, previously Camec’s biggest investor with around 35 per cent of the company.

“This announcement marks the end of an era for Camec, whose directors have built this company up from scratch since raising £0.75m at 3p in 2002,” said Brock Salier, an analyst at Ambrian Partners. “The synergies with ENRC are clear, and, due to the political goodwill that ENRC will be chasing in both the DRC and Zimbabwe, the recommendation by Camec suggests to us that this deal will definitely go through.”

Mr Vulis said that the company has done extensive due diligence and risk assessment work in relation to investing in the DRC and Zimbabwe.

Both companies disclosed on Wednesday that they were in talks about a deal, with a number of analysts suggesting that the 20p a share offer could be bettered by another suitor. The Brazilian mining giant Vale, as well as a number of Chinese investors, had been cited as potential rivals to ENRC. According to African Minerals, Asian groups and an unnamed Brazilian company, thought by many in the market to be Vale, are also contesting ENRC’s supposed approach for that company.