The Board of Directors at Newmont Mining Corp. (NYSE:NEM) has rejected Barrick Gold Corp.’s (TSX:ABX) $17.8-billion U.S. unsolicited takeover bid, saying its deal with Goldcorp Inc. (T:G) represents superior value.
"Our thorough review of Barrick’s unsolicited proposal and its associated risks has reaffirmed our conclusion that the combination of Newmont and Goldcorp represents the best opportunity to create value for Newmont’s shareholders and deliver industry-leading returns for decades to come," said Gary Goldberg, Newmont’s Chief Executive Office, in a news release issued on Monday.
Newmont announced plans to buy Goldcorp in a $10-billion U.S. acquisition in January. In its rejection of Barrick’s takeover bid Monday, Newmont proposed a joint venture with the miner in Nevada where the two companies each have extensive operations. Barrick would hold a 55% economic interest in the joint venture, while Newmont Goldcorp would hold 45%.
Newmont says its proposal would enable the companies to realize the available synergies while avoiding the risks and complexities associated with Barrick’s unsolicited proposal. Barrick had proposed a combination with Newmont early last week. Under the terms of the proposal, Barrick was offering 2.5694 shares for each Newmont share.
