By YEHIURA HRIEHWAZI in BRISBANE
NEWCREST Mining Ltd says it wants to do further due diligence on its takeover target, Lihir Gold Limited (LGL).
Newcrest, Australia’s largest gold miner also warned that Lihir shares, which increased over the last two weeks, could drop if it withdrew its offer to buy the LGL group which operates mines in New Ireland’s Lihir Island, West Africa and Australia.
Its chairman Don Mercer has written a letter to LGL chairman Dr Ross Garnaut asking for access to its data room for the revisit – an indication the company remained more than willing to talk further about its A$9.2 billion (K23 billion) officer which was rejected by LGL on April 1.
Mr Mercer said in the letter that his group had spent the last two weeks talking to shareholders, many of whom are also Lihir investors, about its bid and the response had been “very positive and supportive”.
“Our consultations also confirm our view that the terms of our revised proposal are full and fair,” he said, although he added Newcrest was prepared to improve its offer structure by ensuring shareholders, who want more shares and less cash, or vice-versa, have that option through a “mix and match” structure.
But he said any deal was not vital to Newcrest, and warned that recent gains in Lihir’s share price might be at risk if Newcrest’s proposal did not go ahead.
“We have said consistently that the Lihir opportunity is compelling but not vital to Newcrest,” Mr Mercer said.
Lihir has received Newcrest’s letter and the company is considering its position, Brisbane-based spokesman Joe Dowling said.
LGL said on April 1 the offer was inadequate.
Two weeks later, the company said it appointed Macquarie Capital Advisers and Greenhill Caliburn as advisors to assess strategic alternatives to Newcrest’s proposal.