Investor contacts and FAQ (original) (raw)

On 23 March 2020, Endeavour entered into a definitive agreement to acquire all of the issued and outstanding securities of SEMAFO by way of a Plan of Arrangement under the Quebec Business Corporations Act.

For the past several years, Endeavour and SEMAFO have worked as industry partners to consider shared issues common to companies operating in West Africa. In early 2019, both companies engaged in a mutual dialogue in order to evaluate the merits of a business combination. The dialogue included extensive mutual due diligence as well as discussion of potential terms of a transaction, with a final proposal in May 2019. At that time, it was not possible to agree on terms which appropriately shared the risks and rewards of a combination.

In early 2020, discussions between Endeavour and SEMAFO recommenced. Endeavour’s management team completed on-site due diligence at SEMAFO’s operations in Burkina Faso during February 2020, including a comprehensive assessment of security, operations and exploration. Both companies also re-opened data rooms for mutual confirmatory due diligence, including visits and, following collaborative discussions, confirmed their shared strategic vision and desire to complete a combination subject to negotiation of agreeable terms. Negotiations proceeded, culminating in agreement on the terms of the transaction detailed in this announcement.

Pursuant to the Plan of Arrangement, SEMAFO common shares were exchanged at a ratio of approximately 0.1422 Endeavour ordinary shares for each one SEMAFO common share (the “Exchange Ratio”). The Exchange Ratio represents a premium of 27.2% based on the 20-day volume weighted average price of both companies for the period ended 20 March 2020 and a premium of 54.7% based on the closing price of Endeavour and SEMAFO’s shares on the TSX on 20 March 2020. The implied equity value for SEMAFO is equal to C$1.0 billion based on Endeavour’s closing price on 20 March 2020. Existing Endeavour and SEMAFO shareholders will own approximately 70% and 30%, respectively, of the combined company on a fully-diluted in-the-money basis.