LONDON/TORONTO (Reuters) - A lull in corporate takeover activity among gold miners is expected to end as new coronavirus-linked travel restrictions are lifted in coming months, clearing the way for prospective buyers, industry executives and fund managers said.
Deals this year have been hobbled by lockdown measures to curb the spread of the virus, preventing acquirers from travelling to inspect acquisition targets.
Miners year-to-date have struck 275 transactions worth about $6.9 billion, including net debt, according to data from Refinitiv, down from 329 deals valued around $26.8 billion in the six months to June 2019.
"Our industry is considering coronavirus a thing of the past as most countries are easing lockdowns and this should propel M&A activity again," said Ingo Hofmaier, SolGold’s SOLG.L executive general manager of project and corporate finance.
“Uncertainty and inability to visit mine sites was clearly not helpful.”
(GRAPHIC: Gold mining mergers hit coronavirus snag - )
Gold XAU= is trading at its highest since 2013, around $1,700 an ounce, because of its safe-haven appeal.
"We are being shown a lot more deals but with coronavirus, due diligence is tricky if you are not based on the ground and near the site," said Bert Monro, chief executive of West Africa-focused Cora Gold CORAC.L.
Deals this year largely took shape before the outbreak, executives and bankers said.
In March, Endeavour Mining EDV.TO offered C$1 billion ($726.9 million) for Toronto-listed Semafo SMF.TO. Silvercorp Metals SVM.TO this month hiked its bid for Guyana Goldfields GUY.TO, while China's Shandong Gold Mining 600547.SS1787.HK offered C$230 million ($167.9 million) for struggling TMAC Resources TMR.TO. SSR Mining SSRM.TO also snapped up Alacer Gold ASR.TO.
“Overall we expect more deals in the mid-cap space as companies compete to become relevant,” said David Baker of Baker Steel Capital Managers.
Reporting by Zandi Shabalala in London and Jeff Lewis in Toronto; editing by Ernest Scheyder
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