Newcrest Mining has confirmed it has received an indicative proposal from Newmont Corporation regarding the latter’s $24.45 billion full acquisition of the Aussie gold miner.
The conditional, non-binding offer would see Newcrest shareholders receive 0.38 Newmont shares for each Newcrest share, resulting in the combined company being 30 per cent owned by Newcrest and 70 per cent owned by Newmont.
This equates to a Newcrest share price of $27.16 and a 21 per cent premium to Newcrest’s closing share price on Friday.
This is up from a previous offer comprising 0.363 Newmont shares for each Newcrest share, which Newcrest previously rejected due to it not delivering “sufficiently compelling” value to Newcrest shareholders.
“The Newcrest board, together with its financial and legal advisers, is considering the indicative proposal,” Newcrest said in a statement.
“The Newcrest board advises that shareholders need not take any action in relation to the indicative proposal and remains fully committed to acting in the best interests of Newcrest shareholders.”
The indicative proposal is subject to a number of conditions, including exclusivity to Newmont, due diligence, Newmont shareholder approval and various regulatory approvals.
Newmont owns the Boddington and Tanami gold mines in Western Australia and the Northern Territory, respectively. The company would be complemented by Newcrest’s Cadia and Telfer gold mines in NSW and WA, respectively, if the transaction was approved.
Newcrest also owns a share of the emerging Havieron gold project in WA, as well as international operations, the Brucejack and Red Chris gold operations in Canada and the Lihir gold operation in Papua New Guinea.
Newcrest recently announced board approval for a Lihir expansion that would unlock 400,000 ounces of gold over four years from the Phase 14A zone at Lihir. This sent Newcrest shares to a new six-month high.
The company has jumped again following announcement of Newmont’s takeover bid and was trading at $24.71 at the time of writing (3:20pm AEDT, February 6) – 26.7 per cent higher than six months before.
Newmont president and chief executive officer Tom Palmer said the two companies together was a natural fit.
“We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce and the communities in which we operate,” he said.
“The proposed transaction would join industry-leading portfolios of assets and projects to create long-term value across the combined global business, and we welcome the consideration of Newcrest’s board of directors.”