LONDON (ShareCast) - (Sharecast News) - Newmont Mining has rejected a $18bn hostile takeover by Canada's Barrick Gold, the world's largest miner of the precious metal.
US-based Newmont - which is pursuing its own $10bn takeover of smaller rival Goldcorp - said the board had concluded that the all-stock, negative premium approach was not in the best interest of shareholders.

Barrick first announced its interest in Newmont at the end of February. At the time, Barrick said a merger would create "the world's best gold company with unprecedented potential for value creation". It argued it would unlock more than $7bn of synergies, a "major portion" of which would be created by combining the companies' highly lucrative operations in Nevada.

But Gary Goldberg, Newmont chief executive, said on Monday: "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.

"Unlike Barrick, Newmont-Goldcorp will be centred in the world's most favourable mining jurisdictions and gold districts. The combination is significantly more accretive to shareholders on all relevant metrics compared to Barrick's proposal, even when factoring in Barrick's own synergy estimates."

Instead, Newmont detailed a potential joint venture with Barrick regarding their Nevada operations. Both companies have owned neighbouring mines in the state since the 1980s.

Goldberg said: "This proposal would enable both companies' shareholders to realise the available synergies while avoiding the significant risks and complexities associated with Barrick's unsolicited proposal."

Under the proposed terms, Barrick would have an 55% interest and Newmont a 45% stake in the joint venture, with both companies having an equal number of representatives on management and technical committees.

Barrick recently completed a $6.1bn acquisition of Rangold Resources. That deal created the world's largest publicly-traded bullion producer, but it will face increased competition when the Newmont-Goldcorp deal completes.

Barrick did not immediately respond to Newmont's rejection of its bid.

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