African Barrick offer closes

David Hellier
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THE world’s largest gold producer Barrick Gold came to the end of its book-building process yesterday for the imminent London share listing of its African subsidiary African Barrick Gold.

Market sources said shares in African Barrick would be priced within the 550-650p range, valuing the company at a little more than £2bn.

Some have suggested that African Barrick will make an immediate entry into the FTSE 100, although this is by no means assured. Even if the shares are priced at the top of the range, the £2.4bn valuation is not sufficient to ensure automatic entry into the FTSE 100 (though this could well come at a later stage).

Ian Hannam, the doyen of the City’s advisers in the mining sector, is leading the process for sole sponsor JP Morgan Cazenove.

The arrival of African Barrick in London is seen as a major boost to the City’s mining sector. Mining makes up 14 per cent of the FTSE 100 already, although there is currently little exposure to gold.

At 1.3 to 1.6 times net asset value, Barrick shares will be at a discount to shares in Randgold Resources.

African Barrick Gold chief executive Greg Hawkins says his company is coming to the market with a clearly defined growth strategy, a positive market backdrop for gold and a track record of operational success. The group will up-date the market today.