A hostile bid for Newmont Mining Corp. may force its shareholders into a tough decision: proceed with plans to acquire and turn around an industry laggard, or be swallowed by a long-standing rival.
Barrick Gold Corp. confirmed Friday that it has examined an all-stock takeover offer to acquire Colorado-based Newmont. Toronto-based Barrick said the bid it was contemplating would not contain a takeover premium, but the news sent Newmont shares 3 per cent higher, indicating some investors believe a formal offer will come.
The Globe and Mail reported Thursday that Barrick is mulling a US$19-billion takeover of Newmont that would involve the company flipping some Newmont assets to another company, possibly Australia’s Newcrest Mining. Bloomberg also reported Thursday night that Barrick had studied a bid.
A successful takeover by Barrick of Newmont would thwart the latter’s plan to acquire Vancouver-based miner Goldcorp Inc. in a US$10-billion deal announced last month. Newmont says it can save US$100-million a year by combining with Goldcorp, and hopes to be able to turn around the miner.
Goldcorp and Newmont shareholders are scheduled to vote on the union on April 4. “We do not intend to speculate on Barrick’s interest or motivation,” a Newmont spokesperson said in an e-mailed statement on Friday.