Newcrest confirms $25b takeover bid from US mining giant Newmont Corp
By Nick Toscano
Top Australian gold miner Newcrest’s shares have soared after the company received a takeover offer from US-based Newmont Corporation, the world’s largest listed gold producer.
Newcrest received the non-binding bid from Newmont over the weekend to acquire all of its shares via an all-scrip deal, the Melbourne-based company confirmed in a statement to the ASX on Monday. The offer would entitle Newcrest shareholders to receive 0.380 Newmont shares for each Newcrest share they own, implying a value of nearly $US17 billion ($24.5 billion).
News of the takeover bid sent Newcrest shares rallying more than 10 per cent on Monday morning to beyond $24, their highest level since mid-2022.
“The Newcrest board, together with its financial and legal advisers, is considering the indicative proposal,” Newcrest said in the statement. “The indicative proposal is subject to a number of conditions, including granting of exclusivity to Newmont, due diligence, Newmont shareholder approval and various regulatory approvals.”
Newcrest said the offer was the second non-binding takeover proposal it had received from Newmont, a global mining giant based in Denver, Colorado.
The latest offer followed an earlier bid at an exchange ratio of 0.363 Newmont shares for each Newcrest share, which the board determined had undervalued the business, the company said.
Newcrest operates gold mines in Australia, Papua New Guinea and Canada. In recent years, the company has focused heavily on expanding its presence in the Americas, investing in Ecuador-focused gold and copper explorer SolGold, buying a majority stake in Canadian gold mine Red Chris and acquiring Toronto-listed Pretium Resources, which owns the Brucejack mine.
Gold is widely seen as a “safe haven” commodity where investors often store wealth during times of political and economic uncertainty.
The price of gold set a new peak in 2020, hitting $US2075 an ounce, as investors rushed to the metal to hedge against the volatility of the coronavirus pandemic and fears of inflation caused by world governments unleashing trillions of dollars of stimulus.
While the gold price began to ease as economies gradually recovered from the depths of COVID-19, prices have rebounded and are now closing in on $US1900 an ounce again amid deepening concerns about soaring consumer prices and the economic volatility unleashed by the Russia-Ukraine crisis.
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Source: Thanks smh.com