Barrick Gold Corp. has made a formal merger offer for rival Newmont Mining Corp.in an all-stock deal that would combine two of the world's largest gold producers.
Newmont expressed the belief that it could itself capture Nevada synergies more efficiently through a Nevada joint venture between the companies without exposing Newmont's shareholders to Barrick's riskier portfolio, integration risks and transaction costs.
The deal was given urgency because of Newmont's deal to buy Goldcorp, Bristow added, saying he didn't want "a bunch of less-attractive assets coming in from Goldcorp".
Newmont, in a response to Monday's bid, said the offer from Barrick was "at a negative premium".
Barrick chief executive Mark Bristow.More news: Man Spends $540 on Cookies to Get Scouts Out of Cold
The Barrick/Newmont transaction, Bristow contended, was a logical and long overdue imperative for shareholders that would be far superior to Newmont's proposed acquisition of Goldcorp, with expected Barrick/Newmont yearly synergies 7.5 times larger than the quoted annual synergies for the Newmont/Goldcorp transaction.
A major portion of the synergies between the companies would be in Nevada, United States, where the deal would combine Barrick's mineral endowments with Newmont's processing plants and infrastructure. (NEM.N) shareholders that he can do a better job. Newmont, the largest gold miner in the USA, is also the only gold mining firm in the Standard & Poor's 500.
"The combination of Barrick and Newmont will create what is clearly the world's best gold company, with the largest portfolio of Tier 1 gold assets and the highest level of free cash flow to drive future growth and support sustainable shareholder returns, run by a management team with an unparalleled record of delivering growth", Bristow said.
Bristow is new to running Barrick, having taken the top job in January after the completion of the company's takeover of Randgold Resources Ltd. Goldcorp's stock meanwhile traded up 0.34 per cent to $14.65.
Barrick also said the new company would match Newmont's annual dividend of 56 cents per share which, based on the offer, will represent a pro-forma annual dividend of 22 cents per Barrick share.More news: Anthony Joshua questions why Deontay Wilder chose to fight Tyson Fury
Newmont CEO Gary Goldberg called Barrick's proposed takeover "desperate" and "bizarre".
Goldberg said earlier on Monday a joint venture was a better way to extract value from the two companies' mines in Nevada, the largest producer of gold and silver among USA states. It said that Barrick was ignoring risks of such a deal, and overstating potential rewards.
Barrick kicked off a gold mining consolidation rush last month when it acquired Randgold Resources for more than $US6 billion.
Goldberg said he had evaluated acquisitions of both Barrick and Randgold over the years, but neither deal would have met the risk and return requirements at his company.More news: Olivia Colman's Oscars speech is the most British thing ever