Top Australian gold miner Newcrest has rejected a takeover proposal from US mining giant Newmont, arguing it undervalues the company, but has agreed to open its books to extract a higher offer.
Newmont, the world’s largest listed gold miner, launched a bid this month to acquire of Melbourne-based Newcrest’s shares at a 22 per cent premium to their previous closing price in a deal that values the company at nearly $US17 billion ($24.5 billion).
In an update to investors on Thursday, Newcrest said its board had considered the indicative offer but had unanimously determined to reject it as it “does not represent sufficient value for Newcrest shareholders”.
“In order to determine if Newmont can provide an improved proposal for consideration by the board that appropriately reflects the value of Newcrest, the board has indicated to Newmont that it is prepared to provide access to limited, non-public information on a non-exclusive basis,” it said.
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.
Melbourne-based Newcrest owns gold and copper mines in New South Wales, WA, PNG and Canada, and holds equity interests in gold assets in Ecuador.
Shares in ASX-listed Newcrest have climbed more than 8 per cent since it told investors that it was assessing Newmont’s all-scrip takeover offer.
However, analysts and investors have raised questions about whether the $27-a-share bid is high enough for Newcrest.