Barrick makes $18 bln hostile bid for Newmont

Credit: Reuters Studio
Published on February 25, 2019 - Duration: 01:11s

Barrick makes $18 bln hostile bid for Newmont

Canada's Barrick Gold offered to buy U.S. rival Newmont Mining for nearly $18 billion in stock in a hostile takeover that seeks to combine the world's two largest gold producers.

Fred Katayama reports.

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Barrick makes $18 bln hostile bid for Newmont

Canada's Barrick Gold is mounting a hostile takeover of U.S. rival Newmont Mining.

It's offereing $18 billion in stock.

But Newmont said 'no.'

It argued its own $10 billion pending purchase of a smaller rival, Goldcorp, makes more sense.

Newmont shares fell.

Barrick's shares traded slightly lower.

CFRA's equity analyst Matthew Miller: (SOUNDBITE) (English) CFRA RESEARCH, EQUITY ANALYST, MATTHEW MILLER, SAYING: "Newmont is caught up in its acquisition of Goldcorp, and the break fee is pretty substantial, it's $650 million.

So, if Barrick is successful in his bid for Newmont, that's a pretty substantial hit.

But, if you're looking at $7.5 billion of annual synergies, that is a number that shareholders may not be able to resist.

So, now the Newmont shareholders are presented with an option of the Goldcorp takeover, or going with the Barrick merger." Dealmaking in the gold sector took off last month, when Barrick paid over $6 billion to buy another rival, Randgold Resources.

It comes at a time when gold prices are rising, some 11 percent since October.

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