On Monday, Newmont Mining Corp rejected the unsolicited offer for US $ 18 billion from rival Barrick Gold Corp, saying that the proposal for all the shares was not in the best interest of its shareholders, as it was offered at a discount.
Barrick had offered 2.5694 of its common shares for each Newmont share, which translated to about US $33 per Newmont share on February 25, which represents a discount to the Newmont trading price of approximately US $3. Newmont shares closed at US $33.82 on Friday.
Newmont said on Monday it would continue with its deal to buy smaller rival Goldcorp Inc, which it saidit’smuch more substantial for its shareholders compared to Barrick’s proposal.
The agreement with Goldcorp would make the combined company the world’s largest gold producer, ahead of Barrick.
However, Newmont said it submitted a joint venture proposal to Barrick for operations in Nevada.
According to the terms of the joint venture proposed by Newmont, Barrick will have a 55% majority stake in the new entity, while both companies will have equal representation in the management and technical committees.
The new terms come after Barrick Gold CEO Mark Bristow expressed concerns about management control in the proposed joint venture.
Newmont has 19 mines in Nevada, adjacent to Barrick’s own operations.