Australian gold miner Newcrest Mining Ltd. rejected an initial $17 billion takeover bid by American rival Newmont Corp. that would have been the biggest globally so far this year.
(Bloomberg) — Australian gold miner Newcrest Mining Ltd. rejected an initial $17 billion takeover bid by American rival Newmont Corp. that would have been the biggest globally so far this year.
“The board has considered the indicative proposal and has unanimously determined to reject the offer as it does not represent sufficient value for Newcrest shareholders,” the company said in a regulatory filing Thursday, but said it indicated to Newmont that it’s prepared to provide access to limited, non-public information on a non-exclusive basis.
Newmont offered to acquire Newcrest earlier this month in an all-shares deal that valued the company at the time at $17 billion and that would create the world’s biggest gold miner. Gold mining executives and analysts say an upswing in gold mergers is overdue, driven by dwindling production at existing mines, a lack of new discoveries and a sustained period of historically high gold prices.
Read More: Top Gold Miner Newmont Offers $17 Billion for Newcrest
Newcrest is attractive because of the comparatively long life of its assets of more than 20 years. The company’s copper assets, which account for around a quarter of revenue, may also be attractive to potential buyers, as demand for the metal that’s key for renewable energy infrastructure, electric vehicles and electricity networks is expected to surge as the world moves away from fossil fuels.
Read more: Newmont Bets That Big Is Beautiful: Elements by Clara F. Marques
Some analysts had questioned Newmont’s valuation, with Citi analyst Kate McCutcheon saying in a research note on Feb. 12 that a “bump to the offer price will be required to get a deal over the line.”
–With assistance from Victoria Batchelor.
(Updates with details and background throughout)
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