Barrick Gold Corp. considered merely selling assets to African gold major Randgold Resources Ltd. but as talks progressed, the prospect of a takeover took centre stage.
A regulatory filing released by Barrick on Friday sheds more light on how the two gold majors got together, a process that took about four years, and is the biggest deal in the gold sector in seven years. The management information circular also shows that Barrick director Nancy Lockhart resigned on the eve of the US$6-billion takeover announcement and did not attend the final board meeting.
After becoming executive chair of Toronto-based Barrick in April, 2014, John Thornton held “periodic meetings” with Mark Bristow, Randgold’s founder and chief executive, to discuss “potential strategic opportunities,” according to the circular.
In February of this year, the two met and discussed a number of possible transactions, including Barrick selling assets to Randgold in exchange for stock, or a takeover. In the weeks that followed, the asset sale scenario became the focus. However, that changed in mid-May when Mr. Bristow called Mr. Thornton and told him he was interested in a takeover of Randgold, as opposed to it buying assets from Barrick.
By early June, both executives agreed that any takeover would have to be done at no premium, meaning Barrick would have to buy Randgold at its market value and not pay anything extra.
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