The biggest gold-mining takeover in seven years got its start with an arranged meeting. A mutual friend introduced John Thornton, Barrick Gold Corp.’s executive chairman, to Randgold Resources Ltd.’s founder and chief executive officer Mark Bristow, and in late 2015 they sat down together.
Mr. Thornton hosted Mr. Bristow at his villa in Palm Beach, Fla., a limestone mansion on the oceanfront. Barrick, the world’s biggest gold producer, was in rough shape at the time. The Canadian company was mired in debt after a disastrous foray into copper in Africa and a painful decision to abandon construction of a South American mountaintop mine after spending US$8.5-billion.
Barrick had lost the confidence of investors. Barrick’s stock hit a 26-year low, trading for less than $9 a share. Mr. Thornton was working to stabilize the company by selling assets and paring debt.
At that first meeting, Mr. Thornton and Mr. Bristow chatted broadly about the mining industry and found they had a lot in common. They agreed on the advantages of a small headquarters, the importance of a partnership culture, a focus on quality assets and an emphasis on the long term. Mr. Bristow told Mr. Thornton he had in fact modelled Randgold on Barrick’s early years under founder Peter Munk, when it was significantly leaner without layers of middle management.
Unlike Barrick, which had written down billions of dollars over the past few years, Jersey-headquartered Randgold kept its operations largely trouble-free over its 20 years of existence. It had deftly navigated the often-dicey political scene in Africa, where all its mines are located, diligently paying its taxes and staying on good terms with governments.
For the rest of this article: https://www.theglobeandmail.com/business/article-how-the-deal-between-barrick-gold-and-randgold-resources-came-together/