One analyst downgraded Newmont from outperformer to neutral ‘until the company provides additional clarity on its strategic plans’
Gary Goldberg, chief executive of Colorado-based Newmont Mining Corp., started off Tuesday morning feeling upbeat.
One day after announcing his company’s US$10 billion bid for Vancouver-based Goldcorp Inc., his company’s stock was trading down, again, falling three per cent at one stage on Tuesday, after falling 8.89 per cent on Monday; and now Goldcorp was also trading down more than three per cent.
Reaction to the deal looked decidedly mixed. One analyst was raising questions about the rationale for the deal and another was suggesting the price was too low and Goldcorp could attract other bidders; and yet Goldberg insisted none of it was surprising or unnerving in the slightest.
“I think, at this stage, because there was very little market noise in advance, we’re really getting people up to speed, and explaining it,” Goldberg told the Financial Post on Tuesday.
Under the deal, Newmont would acquire each Goldcorp share for 0.328 of a Newmont share plus two cents cash — a 17 per cent premium to Goldcorp’s volume-weighted trading price, which had already been beaten down in 2018 from more than $19 last January to around $13 by December.