Newmont, the world’s biggest gold miner, has made two tentative bids for Newcrest in a deal worth more than $24 billion.
Newcrest confirmed that it received a conditional and non-binding indicative proposal from Newmont on Sunday.
Newcrest said that under the Indicative Proposal, Newcrest shareholders would be entitled to receive 0.380 Newmont shares for each Newcrest share held. That’s worth around $A27 per share (Newmont’s shares closed at $US49.85 on Friday) – higher than Friday’s close of $A22.45 but still less than the 52-week high of $US28.96.
This was the second offer made over the weekend. The first was 0.363 Newmont shares.
” The Newcrest Board had considered that the earlier proposal from Newmont would not deliver sufficiently compelling value to Newcrest shareholders and on that basis, rejected the earlier proposal,” Newcrest said in a statement to the ASX on Monday.
“The Indicative Proposal is subject to a number of conditions, including granting of exclusivity to Newmont, due diligence, Newmont shareholder approval and various regulatory approvals, including FIRB and approval under the Hart-Scott-Rodino Act.
“The Indicative Proposal also contemplates the establishment of a Chess Depositary Interest listing on the ASX for new Newmont shares issued to Newcrest shareholders.
“The Newcrest Board, together with its financial and legal advisers, is considering the Indicative Proposal.”
This is far from a fait accompli. Along with the regulatory and shareholder hurdles, there’s every chance Barrick, the world’s second biggest miner and an off-and-on bidder for Newmont, will look to join the bidding war.
