Newcrest Mining said that its board has determined unanimously to reject the recent $16.9bn takeover offer from rival gold miner Newmont on the basis that it does not represent enough value for the company’s shareholders.
Earlier this month, Newmont proposed the all-stock deal under which it planned to acquire 100% of the Australia-based gold miner through a scheme of arrangement. Under this, Newmont proposed to exchange 0.38 of its shares for each Newcrest Mining share held.
The offer from the US-based mining major implied a value of A$27.16 ($18.8) per share for the Australian miner.
Going by the exchange ratio, the combined company would be owned 30% by Newcrest Mining’s shareholders, while the remaining 70% will be owned by Newmont’s shareholders.
While rejecting the offer, Newcrest Mining’s board said that the company is ready to give access to limited, non-public information on a non-exclusive basis to Newmont. This is for determining if the latter can come up with an improved bid.
The Australian gold miner said that the provision of the information is subject to some conditions such as the signing of a relevant non-disclosure agreement.
Newcrest Mining cautioned that there is no assurance that any further talks with Newmont will result in a revised proposal or any deal.
The Australian miner stated: “The Board considers Newcrest to be uniquely positioned with a portfolio of long-life Tier 1 gold and copper assets, with increasing copper exposure and a high-quality development pipeline. The Board remains fully committed to acting in the best interests of Newcrest shareholders.”
Previously, Newmont made an indicative, non-binding, and conditional acquisition proposal to Newcrest Mining at an exchange ratio of 0.363 of its shares for each Newcrest Mining share. The offer was turned down by the Australian miner’s board saying that it will not generate sufficient compelling value for the company’s shareholders.
Newcrest Mining has operating mines in Australia, Papua New Guinea, and Canada, while Newmont operates in mining jurisdictions in North America, Australia, Africa, and South America.
