Newmont Mining Corp. plans to pay its shareholders a one-time dividend worth US$470-million after a number of its biggest investors pushed for the giant miner to redo the terms of its US$10-billion takeover of Goldcorp Inc.
The sweetener makes it more likely that Colorado-based Newmont will win support from its shareholders, who are set to vote on the transaction in a couple of weeks. If Newmont succeeds, it will bypass Barrick Gold Corp. and become the biggest gold company in the world by market value, production and reserves.
In January, Newmont announced a friendly deal buy Goldcorp in a mostly stock transaction, at a premium of 17 per cent. But some Newmont investors argued the offer was too high considering Goldcorp’s poor past performance.
Last week, New York hedge fund Paulson & Co., which owns a 2.7-per-cent stake in Newmont, threatened to vote against the deal unless Newmont improved the terms, especially in light of Newmont’s recent joint venture (JV) agreement with Barrick Gold Corp.
Paulson argued the JV had materially increased the value of Newmont and as a result Goldcorp shareholders should receive less of its stock as part of the deal. Newmont is currently offering 0.328 of a share and 2 US cents in cash for each Goldcorp share.