Newmont plumps final bid for Australia's Newcrest to $19.5 billion
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[April 11, 2023] By
Melanie Burton
MELBOURNE (Reuters) -Newmont Corp laid down a best and final offer for
Australia's Newcrest Mining Ltd on Tuesday at A$29.4 billion ($19.5
billion) to close a deal that would extend Newmont's lead as the world's
biggest gold producer.
If successful, the deal would lift Newmont's gold output to nearly
double its nearest rival Barrick Gold Corp. The merger is set to be the
third-largest deal ever involving an Australian company and the
third-largest globally in 2023, according to data from Refinitiv and
Reuters calculations.
Newcrest said on Tuesday it had given U.S.-based Newmont access to its
books following the sweetened all-share bid that has received some
support from shareholders.
"I think this offer strikes a better balance. We are positively disposed
to the Newcrest-Newmont merger and would intend to remain a shareholder
of the combined entity were a transaction to proceed," said Simon
Mawhinney, chief investment officer at Newcrest's top shareholder Allan
Gray Australia.
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Under the revised offer, Newcrest shareholders would receive 0.400
Newmont share for each share held, with an implied value of A$32.87 a
share, up from a previous exchange ratio of 0.380 that Newcrest's board
unanimously rejected in February.
"This transaction would strengthen our position as the world's leading
gold company by joining two of the sector's top senior gold producers
and setting the new standard in safe, profitable and responsible
mining," Newmont CEO Tom Palmer said in a statement.
Newcrest shares closed 5.16% higher at A$29.74. Newmont's U.S.-listed
shares were down about 1.72% in premarket trading, which analysts said
reflected some uncertainty over whether the deal would go through.
OPPORTUNISTIC OFFER
Newmont's earlier offer had been seen as opportunistic by some investors
given it came at a vulnerable time for the company. Newcrest is seeking
a replacement for former Chief Executive Officer Sandeep Biswas, who
stepped down in December.
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![](../images/041123PIX/busine58.jpg)
A small toy figure and gold imitation
are seen in front of the Newmont logo in this illustration taken
November 19, 2021. REUTERS/Dado Ruvic/Illustration
![](http://archives.lincolndailynews.com/2023/Apr/11/images/ads/current/graue_lda_preowned_040323.jpg)
"The deal may still be seen as opportunistic by (Newcrest's) board
and shareholders given short-term operational issues, an interim
CEO, and a perceived lack of market appreciation for long-term
project potential," RBC said in a report.
The latest bid is 16% higher than Newmont's initial proposal, and
represents around a 46% premium to Newcrest's share price on Feb. 3
before Newmont's first bid was announced.
Newmont is also offering a franked special dividend of up to $1.10
per share and is seeking unanimous board approval to proceed with
the binding offer after a due diligence period of around four weeks.
"We always thought there would be another bump coming through. It's
probably enough for us," said Andy Forster, senior investment
officer at fund manager Argo Investments in Sydney.
Reuters had reported that Newmont was open to raising its offer
price for Newcrest.
Barrick and miner Sibanye Stillwater Ltd have told Reuters they are
not interested in bidding for Newcrest.
Newcrest's operations include its top-class Cadia asset in
Australia, an expanding footprint in North America and Papua New
Guinea, and growth potential in copper, highly prized as key to the
world's energy transition.
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($1 = 1.5049 Australian dollars)
(Reporting by Melanie Burton; Additional reporting by Harish
Sridharan and Sameer Manekar in Bengaluru; Editing by Sriraj
Kalluvila, Anil D'Silva, Sonali Paul and Christian Schmollinger)
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