In an unusual step early in a takeover attempt, Barrick released a public letter to the board of Newmont with details of its proposal, urging them to support it.
A key part of Barrick’s quest for Newmont are its adjoining assets in Nevada. The two companies have talked about how some sort of “unification” of their operations could benefit them.
Newmont advanced 1.4 per cent in early trading as of 6:14 am (10.14pm AEDT) in New York. Barrick slipped 1.3 per cent.
“There is no other transaction in our industry that can create better value for shareholders and other stakeholders than a business combination between Newmont and Barrick,” John Thornton, the executive chairman at Barrick, wrote to Newmont’s board. “The market reaction to date to your Goldcorp transaction suggests that investors do not endorse your rationale.”
Building the world’s largest gold miner was a goal of Barrick’s late founder Peter Munk, but in recent years the company has struggled to keep pace as it dealt with debt issues by selling assets and seeking joint ventures.
On Friday, Barrick informed the Newmont board that it bought 1000 shares and warned the Greenwood Village, Colorado-based miner that it plans to propose changes to its bylaws, according to people familiar with the matter.
–With Steven Frank
Bloomberg
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