Having already increased its offer once, Newmont Corporation’s upgraded takeover bid still isn’t enough to satisfy Newcrest Mining.
Newcrest announced on Thursday its board had unanimously rejected the offer, which would see Newcrest shareholders receive 0.38 Newmont shares for each Newcrest share, “as it does not represent sufficient value for Newcrest shareholders”.
In an interview on Bloomberg Television, Newcrest interim chief executive officer Sherry Duhe said the company is “worth a lot more” than Newmont’s bid.
“We had not put the company up for sale and this offer was unsolicited,” Duhe told Bloomberg.
The Australian gold miner, which operates the Cadia and Telfer gold mines in NSW and WA, said it was still offering Newmont the opportunity to optimise its proposal.
“In order to determine if Newmont can provide an improved proposal for consideration by the board that appropriately reflects the value of Newcrest, the board has indicated to Newmont that it is prepared to provide access to limited, non-public information on a non-exclusive basis,” Newcrest said in a statement.
“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.”
Newmont’s takeover bid became public on February 5, however Newcrest indicated that Newmont had already tabled an earlier bid comprising 0.363 Newmont shares for each Newcrest share.
Duhe said the company was open to “seeing how things go” regarding conversations with Newmont.
“What is important for people to know is that Newcrest is a fantastic company with a world-class level portfolio of both gold and copper assets and we have a great funnel of growth and a strong balance sheet to fund that,” she said.
“Our focus as management remains on that and we’ll have to see where these conversations go.”
There have been reports of other suitors for Newcrest, including Barrick Gold, but chief executive Mark Bristow shut down the idea at a mining conference in Cape Town earlier this month, suggesting a deal “didn’t make sense right now”.
Combining Newcrest and Newmont would create an Australian gold mining behemoth, with Newcrest’s Cadia and Telfer gold mines to be complemented by Newmont’s Boddington and Tanami gold operations in WA and the Northern Territory, respectively.
While Newmont also has a strong footprint in Africa, North America and South America, Newcrest has operating assets in Papua New Guinea and Canada, and a world-class exploration project in its Havieron joint venture with Canadian-based Greatland Gold.
Newcrest’s Newmont rejection coincided with the company announcing its half-year results, where it declared a $US0.15 interim dividend and a $US0.20 special dividend, which is connected to the repayment of a credit facility from Lundin Gold.
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