The Egyptian billionaire Naguib Sawiris has made an audacious US$500 million (Dh1.83 billion) offer to buy a Canadian gold mining company.
The move comes amid growing market talk of a resurgence in the price of the yellow metal.
The businessman, based in Cairo, plans to buy the Montreal mining group La Mancha Resources in what analysts said marked a radical departure in his investment strategy.
Mr Sawiris, the head of one of Egypt's richest families, confirmed the deal was in progress but declined to comment further because the transaction has not yet completed.
La Mancha has a "geographically diverse portfolio of assets offering exposure to growth", he said.
Shares in La Mancha jumped by 52.44 per cent after the deal was announced on Friday, closing at C$3.43. That is below Mr Sawiris' offer to acquire La Mancha for C$3.50 per share, which was accepted by the company's board.
The planned acquisition of the gold miner has been put forward through the firm Weather Investments II, which is managed by Mr Sawiris. La Mancha, which is listed on the Toronto Stock Exchange, operates four gold mines in Africa and Australia.
Ibrahim Masood, a senior investment officer for asset management at Mashreq, said gold had proved to be a stable long-term investment over the past decade.
"It has had an amazing 10-year run," he said. Despite a drop in the gold market this month, a report issued yesterday by Emirates NBD pointed to a recovery late last week.
"Strong buying emerged [partially in sympathy with silver], which puts gold back on the road to recovery," the UAE bank said in its Precious Metals Report.
Gold prices have declined by about 1.4 per cent this month but rose on Friday in a spell of positive trading attributed to good economic growth signals in China.
Mr Sawiris is the founder of Orascom Telecom Holding and his family has other interests in construction, fertilizers, cement and hotels. He had reportedly been looking to reinvest in the telecommunications business, having sold his stake in the Tunisian operator Tunisiana, and agreed a merger with Russia's VimpelCom over much of his Orascom assets.
Gold mining marks "quite a departure" in his investment strategy, said Mr Masood.
"This is a completely new playing field for him," he said.
"I'm struggling to figure out where it fits into his overall plan. It doesn't reflect very well on the outlook for telcos globally. One would assume that would be his first point of interest."
Mr Sawiris is ranked by Forbes as Egypt's second-richest person, with a net worth of $3.1bn. His brother Nassef, who runs Orascom Construction Industries, is listed as Egypt's richest, with a fortune of $5.1bn.
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