MELBOURNE (Reuters) US-based Newmontcorp’s Newcrest Mining (OTC:OTC:His NCMGF) Ltd, the acquisition that will create the gold-mining giant, may be too low after the Australian company’s management changes, investors and analysts said.

Already the world’s largest gold producer by market value and production, Newmont will produce nearly twice as much yellow metal as rival Barrick Gold (NYSE:
GOLD) Newcrest Corp. But the proposal reinforces long-standing concerns that a gold acquisition would destroy rather than create shareholder value.

Newmont’s stock fell more than 4% on Monday when he was trading at $47.67.

“Other bidders may emerge and Newmont will likely need a slightly higher price to close the deal,” said Chris Rafemina, an analyst at Jefferies. . . Newcrest is looking to replace former CEO Sandeep Biswas, who stepped down in December. Meanwhile, the outlook for the gold price has improved from expectations that global interest rates will peak this year and fall thereafter.

If successful, the all-equity buyout would be the largest mining acquisition in Australian history and the third largest corporate takeover, according to Refinitiv data.

Nucrest, which spun off from Newmont in the 1990s, said it was considering the proposal. Newmont, which called the combination a “strong value proposition,” declined to make any of its executives available in an interview Monday to discuss the proposed deal. Initial feedback from shareholders is that they want a higher price, according to people familiar with Newcrest’s thinking.

“Affordable, good-trading litmus testers were oversold and overpaid by both sellers and buyers,” said Simon Mawney, chief investment officer of Nucrest’s largest shareholder and Alan Gray, which has a valuation of 7.4. It’s about being a little bit moody,” he said. % wager. “I am not aware of any such symmetry in these terms and conditions.”

Newcrest shares rose 14.4% to A$25.60 on Monday, their highest since May 2022, but implied his bid fell below $27.16. Shares were up 9.3% as he closed at A$24.53.

In a note to clients, Morningstar analyst John Mills said, “We believe Newcrest is in the game right now, but if the deal does go through, it will need to trade at a higher price. is likely to become Mills, who values ​​Newcrest at about A$31 per share, said the offer represents a 21% premium to Newcrest’s share price prior to the announcement of the offer, which would represent a 21% premium to previous acquisitions. Well below the 30% premium.

Newcrest’s activities include his world-class Cadia project in Australia, the expansion of his New Guinea footprint in North America and Papua, and the growth potential of copper, which is highly regarded as key to the world’s energy transition. included.

A Newcrest shareholder will receive 0.38 Newmont shares for each Newcrest share and will get his 30% stake in the expanded miner. Newcrest announced Monday that he is a 4.7% improvement over previous offers that were rejected for not providing enough value.

Newmont himself fended off his $18 billion bid from Barrick in 2019. leadership sales

Newcrest is set to announce a new CEO this year after Biswas announced his first retirement in eight years.

In February 2022, he joined Newcrest as Chief Financial Officer, Sherry Duhe as interim CEO, and a global search for a replacement is ongoing both internally and externally.

Nucrest has been seen as a target in recent years because of its so-so performance, but investment bankers who aren’t allowed to speak publicly on the subject say no buyer big enough to take it off. He said it was only a handful.

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