Photo: Diario La Ventana / Agence France-Presse
A mine of Barrick Gold in Argentina
The chief executive of Barrick Gold, has strongly criticized Monday the officers of Newmont Mining in describing his vision of 18 billion US $for a merger of the two mining giants.
The chief executive officer of Barrick, Mark Bristow, said that a combination of the two companies was expected for too long “and that it would be” far superior ” to the proposed acquisition of a vancouver Goldcorp by Newmont. In addition to arguing that the plan Barrick was financially superior, Mr. Bristow has argued that the project of Newmont seemed to him to be ” both desperate and bizarre “.
Mr. Bristow has argued that a combination Newmont-Goldcorp did not make any sense, because it seemed “not likely to provide significant benefits to their shareholders,” so that a transaction on Barrick-Newmont would generate 7 billion US $ of synergies ” instant-on “. “This is the reason why we have, after some deliberation, decided to make an unsolicited proposal, but clearly superior to the shareholders of Newmont,” said Mr. Bristow.
“As a team, we cannot wait for the merger of Newmont and Goldcorp, because we do not want that the sub-quality assets to Goldcorp are in our portfolio. “The draft agreement with Newmont comes less than two months after the merger of Barrick with Randgold Resources, which has seen Mr. Bristow, the founder of Randgold, to become ceo of the merged entity.
Mr. Bristow stated that Barrick had repeatedly attempted to enter into an agreement with Newmont in the past, but without success, for “reasons which escape me,” because the benefits are ” so clear and convincing “.
Newmont, based near Denver, said Monday that it continued to see in the approximation Newmont-Goldcorp the “best opportunity” for its shareholders. The plan of Barrick “ignores the risks and exaggerating the benefits,” she pointed out. “Newmont had already determined that the risk profile and performance of Barrick was inferior in many ways, including taking into account the operating model relatively ineffective Barrick, the poor record in shareholder returns, and risk judicial unfavourable “, according to the company.
In the framework of the proposal, without the premium of Barrick, the shareholders of Newmont would receive 2,5694 shares of Barrick for each share of Newmont. The shareholders of Barrick would eventually hold 55.9% of the merged company and the rest would be up to the shareholders of Newmont. On the basis of the closing price on the Toronto stock Exchange on Friday, the offer would cost about 44 $ per share of Newmont, or 33,50 US$. Thus, the offer for Newmont would be 17.8 billion US$.