Analyst Views: What does Barrick’s stake sale mean for African Barrick Gold?
CHARLES GIBSON | EDISON INVESTMENT RESEARCH
Barrick’s sale seems to place a cap on the price of ABG. Whether this is in reality or investors’ minds doesn’t matter. Absenting a move in the gold price, management’s options seem fairly limited. They can either exceed their cost saving targets, develop a new project or engage in some corporate activity to add value.
ROB BROKE | WESTHOUSE SECURITIES
Barrick has made noises in the past about divesting, and this is confirmation that it is indeed looking to reduce its interest in ABG. We view it as a positive for ABG as the management team should get increased flexibility with regards to how it runs the company's operations.
MICHAEL STARKE | SBG SECURITIES
While we think the deal was done at a reasonably fair price, it raises the more fundamental question of when, at what price and to whom Barrick is planning to sell its remaining stake. On the plus side, the additional liquidity makes ABG stock more attractive to a wider institutional audience.