Newmont proposes to acquire Newcrest shares

Highlights:

• Newmont has indicated that the Revised Proposal represents its best and final price in the absence of a competing proposal.
• After assessing the Revised Proposal, Newcrest has agreed to grant Newmont the opportunity to conduct confirmatory due diligence to enable it to put forward a binding proposal.
• Due diligence is expected to be completed within approximately four weeks.

On 11th April 2023, Newmont Corporation put forward a proposal that is conditional and non-binding to acquire all outstanding shares of Newcrest Mining Limited (ASX: NCM) through a scheme of arrangement.

Details of the Revised Proposal

The proposal offers an implied value of AU$ 32.87 per share to Newcrest shareholders, subject to several conditions. Newcrest Mining Limited shareholders are set to receive 0.400 Newmont Corporation shares for each Newcrest share held, as part of the proposal. Additionally, Newcrest will be permitted to pay a franked special dividend of up to US$1.10 per share upon the implementation of the scheme of arrangement. Following the signing of a non-disclosure and standstill agreement on February 16, 2023, Newcrest provided Newmont with limited non-public information to enable it to determine if it could provide an improved proposal that accurately reflected the value of Newcrest.

Conditions of the Revised Proposal

In the absence of a competing proposal, the Revised Proposal put forth by Newmont Corporation, which offers an implied equity value of AU$ 29.4 billion and an enterprise value of AU$ 32.0 billion, is considered their best and final price. Newmont has been granted permission by Newcrest to conduct confirmatory due diligence, which will enable them to submit a binding proposal. This due diligence period is expected to be completed in around four weeks. During this period, Newcrest will also conduct confirmatory due diligence on Newmont. However, the Revised Proposal is contingent on several conditions, such as obtaining regulatory approvals, gaining approval from Newcrest shareholders, and receiving approval from Newmont shareholders to issue Newmont shares as consideration under the scheme of arrangement.

No certainty of a binding offer

For the Revised Proposal to proceed, it is necessary to obtain a unanimous recommendation from the Newcrest Board in favor of shareholders' voting, unless a better proposal is available, and the proposal is deemed to be in the best interest of Newcrest shareholders by an independent expert.

It is uncertain whether the Revised Proposal will lead to a binding offer for shareholders, and thus shareholders are not required to take any action presently. Newcrest will adhere to its continuous disclosure obligations by keeping the market updated regarding any significant developments.

Conclusion

In summary, while the Revised Proposal from Newmont Corporation offers an attractive aggregate implied value to Newcrest shareholders, there are several conditions that need to be met before it can become a binding offer. Shareholders are advised to stay informed of any further material developments.

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