Investor Crispin Odey has backed a Barrick Gold offer for Acacia Mining in principle, but said it would not accept the bid as it stands.
Odey Asset Management, will reject offers from Barrick unless they are open to negotiation, according to a letter seen by the Financial Times.
It comes after Barrick made an offer for the shares it does not own in Acacia.
Its offer, which was criticised as “low ball” and opportunistic by analysts, came amid a major tax dispute with the Tanzanian government.
The administration of John Magufuli slapped Acacia with a ban on exporting gold concentrates from its mines in 2017. It claimed the company owed $190bn in back taxes – around four times Tanzania’s annual GDP.
Barrick, which owns just under 64 per cent of Acacia, started negotiating above the miner’s head directly with the administration in 2018.
Last month Barrick, which is the world’s largest gold company, said it was looking at buying out the remaining shareholders in Acacia.
The deal values Acacia at $787m (£620m), a significant discount to the firm’s £696m market valuation yesterday.
The company’s shares were up 1.3 per cent to 171.9p this afternoon following the report.
In the letter Odey said it “welcomes Barrick’s indicative offer for Acacia and sees a takeover by Barrick of Acacia as the only logical way forward for Barrick.”
“However, Odey gives written confirmation to Acacia that should Barrick make an opening firm offer, whether in the form of a bid or a scheme, that is in a form that is ‘best and final’ . . . then Odey commits to voting against such an opening firm offer under any circumstances.”