By YEHIURA HRIEHWAZI in Brisbane
NEWCREST Mining is making a special appeal to all its smaller shareholders for their support in its bid to buy out Lihir Gold Limited at a price tag of A$9.2 billion (K24 billion).
The company is approaching them after it consulted with its major shareholders in Europe, Australia and North America – some of whom own about 34% of the giant gold mine.
Newcrest chairman Don Mercer wrote to shareholders and posted the letter on the Australian Stock Exchange on Monday.
In the letter, he asked for their views and also explained the benefits if the two companies were to merge.
“Newcrest believes there is compelling logic in combining these two companies and the proposal is attractive to both Lihir and Newcrest shareholders. It would result in Newcrest shareholders owning approximately 65% of the combined organisation.
“With a market capitalisation of around A$24.5 billion and minimal debt net of A$200 million, the combined organisation would have powerful platform which to deliver superior financial performance and to capture and deliver future growth for shareholders,” Mr Mercer said.
“‘We would be delighted to hear your views in relation to the proposal or address any questions you may have,”’ he said.
“Newcrest believes the proposal represents a full and fair offer and remains willing to discuss the proposal with Lihir.”
Mr Mercer said the transaction, put to the Lihir board a week and a half ago, would be to the advantage of both sets of shareholders.
“Newcrest shareholders would benefit from the Lihir Island mine in Papua New Guinea and the potential new growth region in West Africa,” he said.
“Lihir shareholders would benefit from Newcrest’s high-quality diversified asset base, with operating mines in Western Australia, New South Wales, Queensland, Indonesia and Papua New Guinea, as well as advanced exploration opportunities across the Asia-Pacific region.”