The chances of Newcrest Mining falling to foreign control rose on Tuesday after Newmont recast the terms of its February bid, effectively boosting it to more than $A29.4 billion (or more than $A32 billion including debt).
The new offer is 0.4% of a Newmont share plus allowing Newcrest shareholders to be paid a $US1.10 per share dividend.
The news saw Newcrest shares leap from Thursday’s pre-Easter close of $28.21 to end Tuesday $A29.74.
Based on Newmont’s close on Monday of $US51.09, Newcrest shares are valued at around $US20.40 each.At an exchange rate of 67 US cents, the price is around $A30.44. On top is the value of the – roughly $A1.64. That gives a total price of around $A32 per share.
The higher offer has been long mooted after Newcrest rejected an approach in February.
The new terms were enough for Newcrest to give Newmont exclusive due diligence to frame a final offer.
A sharp rise in world gold prices since February of more than $US100 an ounce to over $US2,000 an ounce, has helped make the Newmont offer look sweeter for Newcrest, along with the bump up in the terms and the inducement of a final dividend 9which will no doubt help use up any remaining franking credits).
Newmont had been given limited diligence in February to help further assess its terms.
After assessing the revised proposal, Newcrest said it had agreed to grant Newmont the opportunity to conduct confirmatory due diligence to enable it to put forward a binding proposal,” Newcrest said on Tuesday.
“Newmont has requested exclusivity during the due diligence period as a condition of the revised proposal and Newcrest intends to grant exclusivity on acceptable terms.”
Newmont has indicated that the new offer represents its “best and final price” unless a rival offer is made.
Canadian gold mining giant Barrick Gold – widely considered to be a possible rival suitor for ASX-listed Newcrest – has been saying for month that it was unlikely to challenge.
Based in Denver, Colorado, Newmont has mining operations across the globe spanning gold, copper, silver, zinc and lead. It has two major Australian gold mines – Boddington in Western Australia and Tanami in the Northern Territory.
Newcrest owns gold and copper mines in NSW (Cadia), Western Australia (Telfer), PNG (Lihir) and Canada (Brucejack and Red Chris), and holds equity interests in gold assets in Ecuador. It also has the top tier gold/copper prospect in WA – near Telfer – called Havieron.
If Newmont’s $32 billion bid for Newcrest succeeds, it will be the biggest takeover in the history of the global gold mining industry.
In Australia, Newmont has the Boddington gold copper mine in WA and the Tanami mine (now being expended at a cost of well over $US1 billion).
If Newcrest falls, it will add more than 2 million ounces of annual gold production to Newmont, which will then be clearly the biggest miner globally with an annual production of more than 8 million ounces.
…………
Meanwhile global approvals for BHP $9.6 billion takeover of OZ Minerals continue, with Vietnam’s competition regulator approving the deal ahead of Thursday’s shareholder meeting to vote on the scheme of arrangement.
The approval came as the Financial Review reported that more big investors had given the deal their tick.
Norway’s Norges Bank which owns 4.9% of OZ Minerals says it will vote in favour of the takeover at a vote in Adelaide alongside two large North American pension funds, the California Public Employees’ Retirement System and the Florida State Board of Administration.
The AFR also reported that there is a developing native title claim in South Australia that could impact the planned deal.
