melbourne
Reuters
—
top gold producer newmont
(Nemu) Corp said it had made a $16.9 billion offer to Australian peer Newcrest.
(NCMGF) Mining to build a global gold giant, though investors and analysts said they underestimated the target amid a change in leadership.
Newcrest is looking for a new boss, former chief executive Sandeep Biswas resigned in December, and global interest rates are expected to peak and fall this year, sharpening the outlook for the gold price. I’m calling
The Australian gold mining company said in a filing, a response to media speculation over the weekend, that it was considering an all-stock offer. Initial feedback from shareholders is that they want a higher price, according to people familiar with Newcrest’s deliberations.
Simon Mwinney, chief investment officer of Nucrest’s largest shareholder Alan Gray, said: % wager. “It is not clear to me whether this kind of symmetry exists in these trading terms.”
Newcrest’s share price surged 14.4% to A$25.60 ($17.77), the highest since May 2022, but remained below the current asking price of $27.16, suggesting investors are trading well. It suggests that he is not convinced that he will go. Shares closed 9.3% higher at A$24.53.
Newmont, already the world’s largest gold producer by market capitalization and ounces produced, said the combination represented a “strong value proposition.”
Newcrest’s operations include top-tier Cadia assets in Australia, an expanding footprint in North America and Papua New Guinea, and the growth potential of copper, highly regarded as key to the energy transition. BHP
(BBL) Group provided $6.4 billion to Australian copper mining company Oz
(OZMLF) Minerals December Minerals.
Newmont’s proposal would have to be recommended by Nucrest’s board of directors and is subject to due diligence, various regulatory approvals, and a shareholder vote that could last for months. It is due to scheme.
Morningstar analyst John Mills values Nucrest’s share price at about A$31 per share. This represents a 21% premium to Crest’s final closing price of A$22.45, suggesting it is well below the traditional 30% takeover premium.
Newcrest stockholders will receive 0.380 Newmont stock for each Newcrest stock, and will receive a 30% stake in the enlarged miner. It’s a 4.7% improvement from a previous offer of 0.363 per share that Newcrest had already rejected for not providing enough value to its shareholders, Newcrest said Monday.
Barenjoey analyst Dan Morgan said that if investors don’t support the deal, the board will likely split assets such as Australia’s Javieron and Telfer and Papua New Guinea’s Lihir to keep Nucrest’s value from rising. will be under pressure to improve
Newcrest will announce a new CEO this year after Biswas announced his retirement after an eight-year hiatus.
Former Chief Financial Officer Sherry Duhe, who joined Newcrest in February last year, is the interim Chief Executive Officer, with a worldwide search for a replacement both internally and externally.
Nucrest has been seen as a target in recent years because of its middling performance, but investment bankers who aren’t allowed to speak publicly on the subject are big enough buyers to get rid of it. said it was only a handful.
The all-stock nature of the offer meant the timing was more likely to be related to the weakness of Nucrest’s leadership than a big call in the gold price, but perhaps also reflected a constructive view of the precious metal. Banker added.
In a Jan. 16 report, Morgan Stanley said there were growing risks for gold to rise, with macroeconomists now predicting lower interest rates and a weaker dollar as tailwinds for gold. increase.
Morgan Stanley is eyeing a bull market in spot gold, rising from $1,866 to $2,160 an ounce in the fourth quarter.
