Barrick targets Newmont

Article Excerpt

NEWMONT MINING $34.02 (New York symbol NEM; Shares outstanding: 532.7 million; Market cap: $18.1 billion; TSINetwork Rating: Average; Dividend yield: 1.7%; www.newmont.com) is now the subject of a takeover bid by Barrick Gold (symbol ABX on Toronto). Barrick is offering 2.5694 of its shares for each Newmont share. The unfriendly takeover bid comes on the heels of Newmont’s recent agreement to buy Goldcorp Inc. (Toronto symbol G) for $9.1 billion. The new company—to be called Newmont Goldcorp—would produce 7 million ounces of gold annually and be the world’s largest gold miner. Barrick itself recently paid $6 billion U.S. for African miner Randgold Resources. Barrick believes that merging with Newmont would generate cost savings of $750 million U.S. per year. It also aims to stop Newmont’s Goldcorp buy, but it would have to pay a breakup fee of $650 million U.S. to end that deal. We’ll say more as Barrick’s takeover bid unfolds. But for now, Newmont Mining is still a buy, but only for investors who want to own…

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