Newmont Mining and Barrick Gold threaten Newcrest's Lihir bid Matt Chambers From: The Australian June 08, 2010 12:00AM Increase Text SizeDecrease Text SizePrintEmail Share Add to DiggAdd to del.icio.usAdd to FacebookAdd to KwoffAdd to MyspaceAdd to NewsvineWhat are these?LIHIR Gold closed its data room to prospective bidders last night, with two global majors still seen as potential rivals to Newcrest Mining's $9.5 billion scrip and cash offer. It is understood North American gold giants Newmont Mining and Barrick Gold have been in the data room.
AngloGold Ashanti and Goldcorp are not seen as potential bidders.
Most analysts believe Newcrest's offer of one of its shares for every 8.43 Lihir shares and an extra 22.5c cash per Lihir share should be enough to secure the deal.
If a counterbid was made, it would be unlikely before an independent expert's report due later this month gave rival miners more information on the Newcrest bid.
Lihir agreed to Newcrest's offer, on the condition it was able to continue to let potential suitors gain access to a data room it had set up to defend against a previous, lower Newcrest bid.
Start of sidebar. Skip to end of sidebar. Related CoverageTarget Lihir boasts a bright future The Australian, 23 Apr 2010 Newcrest waits on Lihir reply Courier Mail, 22 Apr 2010 Newcrest seeks Lihir access The Australian, 20 Apr 2010 Newcrest sweetens Lihir offer Herald Sun, 20 Apr 2010 Newcrest seeks further details on Lihir The Australian, 20 Apr 2010 .End of sidebar. Return to start of sidebar. Newcrest's due diligence on Lihir, which is being advised by Macquarie and Greenhill Caliburn, is due to wrap up today.
Neither Lihir nor Newcrest would comment on the due diligence or discussions with other parties.
Based on Newcrest's closing price of $32.25 yesterday, the deal values Lihir shares at $4.05 each.
Lihir closed down 2c at $4, hinting investors thought a higher bid was unlikely.
Lihir shareholders are expected to vote late next month on the deal, which should be completed by August.
The deal has appeal for both miners outside the extra gold production.
For Newcrest, Lihir's mine on PNG's Lihir Island reduces the predator's growing proportion of copper production, which could alienate gold investors.
For Lihir, it is a chance to reduce the risk inherent in most of its output coming from just one mine.
LGL Price at posting:
$4.00 Sentiment: LT Buy Disclosure: Held
