Newmont is the world’s largest producer of gold by ounces.
Photograph by Dado Galdieri/Bloomberg
Newmont
has made an offer worth around $17 billion to acquire Australia’s
Newcrest Mining,
an approach which could set off competing bids as international gold miners seek to secure the most promising long-term assets.
Newmont
(ticker: NEM), based in Colorado and the world’s largest producer of gold, said it it would offer 0.380 of its own shares for each
Newcrest
(NCMGY) share.
“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,” Newmont CEO Tom Palmer said.
The early signs are that Newmont could face competition for the deal. The Australian Financial Review reported on Monday that Newcrest investors are pushing back on the offered price in hopes of setting up an auction, citing Canada’s
Barrick Gold
(GOLD) as the leading candidate for a counter bid.
Newmont surpassed Barrick as the world’s largest gold miner by production when it acquired Goldcorp in a $10 billion deal in 2019. At the time, Barrick made its own hostile bid for Newmont which was rejected.
Newmont’s all-stock proposal for Newcrest implies an offer price of 27.16 Australian dollars, or roughly $18.73, for each Newcrest share. Shares in Newcrest closed 9.3% higher in Sydney on Monday at A$24.53.
Newmont shares were down 5.5% in premarket trading on Monday.
Write to Adam Clark at adam.clark@barrons.com
Credit: marketwatch.com