Newmont Mining (NYSE:NEM) rival聽Barrick Gold鈥檚 (TSX:ABX)(NYSE:GOLD) all-stock $18 billion hostile takeover offer, but left the door slightly open by countering with the terms of a deal to merge their operations in Nevada, U.S.
Chief executive Gary Goldberg said Newmont鈥檚 board had concluded that its (TSX:G) (NYSE:GG) was the best deal for shareholders.
The offer rejection could consolidate the Colorado-based miner as the world鈥檚 biggest gold producer.
鈥淭he combination with Goldcorp is significantly more accretive to Newmont鈥檚 shareholders on all relevant metrics compared to Barrick鈥檚 proposal, even when factoring in Barrick鈥檚 own synergy estimates,鈥� he said. 鈥淩ealizing value through Barrick鈥檚 proposal for Newmont鈥檚 shareholders hinges entirely on a new management team that lacks global operating experience and is only two months into its own transformational integration.鈥�
Under its agreement with Goldcorp, Newmont is not allowed to engage with Barrick on its takeover bid after the board has determined that it鈥檚 not a 鈥渟uperior proposal,鈥� the miner added.
鈥淣ewmont鈥檚 latest proposal is essentially based on the stale and convoluted process that foundered previously,鈥� Barrick new boss Mark Bristow . 鈥淎s usual, it comes with unrealistic preconditions including swapping the chairmanship and the leadership of the JV. Experience has shown us that JVs only work well when the majority owner is also the operator.鈥�
The offer rejection, , could consolidate the Colorado-based miner as the world鈥檚 biggest gold producer, with Barrick grabbing the second place and聽Australia鈥檚 Newcrest Mining (ASX:NCM) the third.
Getting nasty
Newmont鈥檚 contra-proposal sees its Toronto-based rival holding a 55% interest in a Nevada joint venture, while Newmont-Goldcorp would have a 45% stake.
Barrick and Newmont have held merger talks every decade or so for almost thirty years, with the last one blowing at the 11th hour in 2014.
A combination of the two would have created the world鈥檚 No.1 gold miner with annual production of more than 10 million ounces. However, the Canadian firm has not offered a premium, telling shareholders they will benefit from the value created by merging the two companies.
Hostilities between the two companies have grown since Barrick鈥檚 approach last month. On top of the chief executives trading insults, Newmont has now released private communications between Barrick 鈥榮 Bristow and Goldcorp chairman Ian Telfer in which he praises the Vancouver-based miner鈥檚 鈥渟trong portfolio鈥� of assets in 鈥渨orld class districts鈥�. Bristow has previously said that Goldcorp had only one top tier gold asset in its portfolio, which is operated by Barrick.