Barrick investors cool to stock sale, push for board revamp – Boyd Erman and Rachelle Younglai (Globe and Mail – November 2, 2013)

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Pressure is mounting on Barrick Gold Corp. to speed up changes in its boardroom, with some large investors demanding the company improve its governance before subscribing to the $3-billion (U.S) stock offering the gold miner launched to pay down its debt.

The banks underwriting the deal pushed hard to sell the 163.5 million shares on Friday, the day after the transaction was announced.

But by late in the day, the stock was not fully sold. Barrick shares closed at $18.02 on the New York Stock Exchange, 1.8 per cent below the offering price of $18.35.

The offering faces a number of hurdles. It is one of the largest stock sales in Canadian history, and Barrick’s share price has been in a long decline. On top of that, the price of gold fell Thursday and Friday.

But a key sticking point, said people familiar with the situation, is that big investors want to see the appointment of directors who are truly independent of Barrick founder and chairman Peter Munk before putting more money into the company.

Mr. Munk has been reaching out to large shareholders in recent weeks to try to improve relations with major investors, said one person familiar the situation.

Mr. Munk has faced a perception that he wields too much influence, and the board has been criticized for being too cozy with him. Another issue is that some investors feel some directors have been there for too long.

A board decision this year to pay new co-chairman John Thornton a signing bonus of $11.9-million led to a resounding vote by shareholders against the company’s compensation decisions.

A spokesman for Barrick declined comment, citing Canadian and U.S. securities rules.

But in announcing its third-quarter results, Barrick signalled an openness to shareholders’ concerns.

The company said its board was meeting with investors and “addressing the issues that have been raised with our directors, including the modification of the company’s executive compensation arrangements and the rejuvenation of the board through a combination of departures from the board and the addition of independent directors.” Barrick plans to provide an update before the end of the year.

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