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No Deal as Newcrest Rejects Newmont Offer
The board of Australian gold company Newcrest has unanimously rejected a $24.45 billion takeover offer from US gold giant Newmont. The announcement follows…
The board of Australian gold company Newcrest has unanimously rejected a $24.45 billion takeover offer from US gold giant Newmont.
The announcement follows a week-long deliberation within the Australian company, which kept much of the nation’s mining industry holding its breath.
Newcrest announced the decision in an ASX release, saying that the offer did not represent sufficient value for Newcrest shareholders.
But it seems Newcrest hasn’t entirely slammed the door on the takeover, with the board indicating it is prepared to provide access to limited, non-public information on a non-exclusive and conditional basis.
Such an arrangement, Newcrest said, might determine if Newmont can provide an improved proposal for consideration.
The Newcrest board reaffirmed its belief in the company, stating it is uniquely positioned with a portfolio of long-life, top-tier gold and copper assets.
The Newcrest board said it remains fully committed to acting in the best interests of shareholders.
If Newmont was hoping for a bidding war to grease the wheels of the acquisition, its hopes were dashed when rival Barrick Gold made it clear last week it had no intention of making a play for the Australian miner.
“There is a difference between value merger acquisitions and getting bigger for the sake of getting bigger,” Barrick chief executive Mark Bristow said at the time.
The now-rejected offer by Newmont constituted a non-binding indicative proposal, entitling Newcrest shareholders to receive 0.38 Newmont shares for each Newcrest share held, making for a hefty total value of close to $24.45 billion, which was a 22 per cent premium on Newcrest’s market cap at the time.
The proposal follows an earlier offer from Newmont at an exchange ratio of 0.363 shares, which Newcrest rejected on the grounds that it undervalued the company.
“The Newcrest board had considered that the earlier proposal would not deliver sufficiently compelling value to Newcrest shareholders and, on that basis, rejected the earlier proposal,” the Newcrest board said in a statement.
