The Globe and Mail reports in its Tuesday edition that Barrick launched a hostile $17.8-billion takeover bid for Newmont Mining, sparking a war of words between the world's two biggest gold miners (all figures U.S.).
The Globe's Niall McGee and Rachelle Younglai quote Barrick saying that its all-share, no-premium transaction is a "once in a lifetime" opportunity to create a gold titan. Barrick touted the present value of all future cost savings from the deal at $7-billion.
Monday's trading indicates that many investors are less than impressed. Barrick is offering 2.5694 shares for each Newmont share, which works out to $32.40 for each Newmont share. Newmont closed at $36.10 in New York.
"It's hard to support a deal where you would essentially tender your shares and have them be worth less than where they are trading today," said Gabelli analyst Chris Mancini. Newmont is doing a friendly transaction to buy Goldcorp for $10-billion. Barrick boss Mark Bristow extolled the virtues of a Barrick/Newmont tie-up, and criticized the Newmont/Goldcorp deal as "ill advised," and lacking substantial business synergies."
Newmont slammed Barrick's "poor track record on delivering shareholder returns and unfavourable jurisdictional risk."
© 2024 Canjex Publishing Ltd. All rights reserved.