BY FREDA MIKLIN
In a March 4 press release followed by a conference call with investors, Newmont Mining Corporation announced that its board of directors had “unanimously determined that Barrick Gold Corporation’s unsolicited, all-stock negative premium proposal to acquire Newmont is not in the best interests of Newmont’s shareholders.”
Newmont also released a letter March 4 to John L. Thornton, Barrick’s executive chairman and Mark Bristow, Barrick’s CEO from Noreen Doyle, chair of Newmont’s board of directors and Gary Goldberg, Newmont’s CEO, officially notifying Barrick of Newmont’s decision.
Newmont had announced it planned on acquiring Goldcorp of Vancouver and operate under Newmont Goldcorp.
Newmont’s board said that it had conducted a comprehensive review of Barrick’s offer in consultation with its financial and legal advisers. Goldberg said, “Our thorough review of Barrick’s unsolicited proposal and its associated risks has reaffirmed our conclusion that the combination of Newmont and Goldcorp represents the best opportunity to [create value] for Newmont’s shareholders and deliver industry-leading returns for decade to come.”
The letter states that unlike the Barrick proposal, “Newmont Goldcorp will be centered in the world’s most favorable mining jurisdictions and gold districts. The combination with Goldcorp creates significantly more value to Newmont’s shareholders.”
Adding that the Barrick proposal hinged entirely on a new management team that “lacks global operating experience and is only two months into its own transformational integration.”
On a positive note, Newmont proposed a joint venture with Barrick for both companies. Goldberg said, “This proposal would enable both companies’ shareholders to realize the available [strengths] while avoiding the significant risks and complexities associated with Barrick’s unsolicited proposal.”
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