Newmont rejected the offer of Barrick Gold, but proposes a joint venture

Newmont rejette l’offre de Barrick Gold, mais propose une coentreprise

Photo: Douglas C. Pizac Associated Press
At the time of its unveiling, the 25 February, the offer of Barrick gold to Newmont was estimated at $ 18 billion.

The board of directors of Newmont Mining has unanimously rejected the unsolicited offer by Barrick Gold and said to the giant canadian by instead proposing the creation of a joint venture that will exploit the assets of the two companies in Nevada.
 

The chief executive officer of Newmont, Gary Goldberg, and the president of Newmont, Tom Palmer, the nominated successor to Mr. Goldberg, are attacked on the balance sheet of Barrick, Monday, in a conference call with financial analysts. Mr. Goldberg took the opportunity to reiterate his opposition to the offer of Barrick, which would ensure that the shareholders of Newmont would hold approximately 44 % of the merged entity — which would be the most important gold producer in the world. “The proposal self-centered Barrick is designed to transfer the value of the shareholders of Newmont by Barrick,” he said.

The proposal egocentric Barrick is designed to transfer the value of the shareholders of Newmont by Barrick

— Gary Goldberg

The chief executive officer of Newmont has also questioned the experience of the new chief executive of Barrick, Mark Bristow, as well as the assessment of mergers and acquisitions under the guidance of John Thornton, who became the president director of the mine in 2014. Mr. Bristow has swelled the ranks of gold producer established in Toronto when the latter placed a hand on Randgold Resources.

Period of great changes

According to Mr. Goldberg, Barrick is going through a period of great change. However, he believes that the presence of Mr. Thornton impairs the ability of the company to create value for some time. For his part, the president of Newmont stated that it did not agree with the vision of Barrick under which the two companies should be merged into a single company. “Nevertheless, we can make the most of the synergies contained in the proposal for Barrick through a joint venture responsible for the activities of the two companies in Nevada, by working together,” said Mr. Palmer.

44%

The offer of Barrick would ensure that the shareholders of Newmont would hold this percentage of the merged entity, which would be the most important gold producer in the world.

Newmont, which table also on a proposed acquisition of a vancouver, Goldcorp asserts that its proposed joint venture would allow the companies to achieve synergies while avoiding the risks associated with the unsolicited proposal from Barrick. Barrick holds a 55% interest in the joint venture, while that of the entity from the business combination between Newmont and Goldcorp will own 45 %.

By way of a press release, Mr Bristow said that the proposed joint venture of Newmont was inspired by a ” process obsolete […] which had failed previously “, adding that the value of the company would be higher with a single operator at the controls. “We know that we can [be more effective] than Newmont, a-t-he stressed. The shareholders of Newmont and Barrick are going to benefit more. “

At the time of its unveiling, the 25 February, the offer of Barrick gold to Newmont was estimated at $ 18 billion.

Share