A $26 billion gold mining giant based in Australia could be moving closer after Newcrest suggested yesterday it might sweeten its offer for Lihir Gold.
Newcrest said it will lift its takeover offer for Lihir by offering shareholders a greater mix of either shares or cash.
"We are prepared to improve our offer structure to enable shareholders wanting more scrip and less cash (or vice versa) to have that option through a `mix and match’ structure, subject to caps," Newcrest said in a letter to Lihir chairman Ross Garnaut.
It operates gold and copper mines in Australia, Indonesia, Papua New Guinea and Fiji.
Newcrest shares eased 27c to $33.73 yesterday.
At yesterday’s close it had a market capitalisation of about $16.4 billion.
Lihir shares closed down 8c (2%) at $3.88.
It operates mines in Australia, Papua New Guinea and the Ivory Coast in West Africa.
Its market cap at the close was almost $9.4 billion.
So a gold mining giant with a market cap of around $26 billion, which would attract considerable new interest from large global investors.
If the takeover deal goes ahead the merged entity would become the world’s fourth largest gold company.
The news came as there were suggestions that global giants, Newmont or Barrick might be sniffing around Lihir, prepared to make a counter offer as a white knight.
Newcrest last month made a cash and scrip bid for Lihir valued at $9.2 billion, which was rejected by Lihir’s chairman as too low.
Under that bid Newcrest offered shareholders one Newcrest share for every nine Lihir shares held, plus 22.5 cents cash per share.
Yesterday, Newcrest said that after two weeks of market consultations it was ready to change the offer details.
No doubt the rumours of the big foreign miners might have made the market "consultations" a bit more urgent for Newcrest.
"Our consultations also confirm the view that the terms of our revised proposal are full and fair," Newcrest said.
Newcrest said it also expected access to a new data room created by Lihir to assist potential takeover suitors.
"Lihir has already released a lot of additional information to the market in the last six months.
"This includes reserves and resources upgrades, increased long term production guidance and growth plans.
"These are already reflected in our current proposal," Newcrest said.
