Newcrest Mining Limited has signed a binding scheme implementation deed (SID) with Newmont Corporation to acquire 100% of Newcrest’s outstanding shares through a scheme of arrangement (Newmont Transaction).
Newcrest stockholders will get 0.400 Newmont shares (Scheme Consideration) for each Newcrest share. Newcrest may also pay a franked special dividend of up to US$1.10 per share around the scheme of arrangement.
When combined with the franked special dividend, the Scheme Consideration received by Newcrest stockholders under the Newmont Transaction represents:
- a share price of A$29.27 per share for Newcrest;
- an indicated equity value of A$26.2 billion and an enterprise value of A$28.8 billion for Newcrest;
- On implementation, Newcrest shareholders will own 31% of the merged group;
- a premium of 30.4% over Newcrest’s undisturbed closing price of A$22.45 per share on 3 February 2023; and
- on 3 February 2023, a 39.1% premium over Newcrest’s undisturbed 30-day volume weighted average price (VWAP) of A$22.22 per share.
In addition to a considerable premium above Newcrest’s undisturbed share price in early February, the Newmont Transaction provides Newcrest shareholders with a variety of benefits through exposure to the merged firm, including:
- Increased diversification across a top portfolio of gold and copper assets in low-risk jurisdictions
- Increased project sequencing flexibility and development potential
- Market leadership in terms of safety and sustainability; and
- Enhanced efficiency as a result of economies of scale
The Newcrest Board unanimously recommends that shareholders vote for the Newmont Transaction in the absence of a Superior Proposal (as defined in the SID) and subject to the Independent Expert’s continued conclusion that it is in Newcrest shareholders’ best interests.
“This transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline. In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefitting from a material and growing exposure to copper and a market leading position in safety and sustainability. The Newcrest Board is unanimously recommending the proposal. We are very proud of the entire Newcrest team for building a world class metals business, which will form a key part of the combined group. We believe our shareholders and other stakeholders can look forward to an exciting and prosperous future,” Newcrest Chairman Peter Tomsett said.
Newmont will create a foreign exempt listing on the ASX to allow Newcrest shareholders to trade Newmont shares via CHESS Depositary Interests (CDIs). Newcrest shareholders can choose NYSE-listed Newmont shares or ASX-listed CDIs for the Scheme Consideration.
According to Newcrest, the scheme of arrangement is subject to many conditions, including approval by Newcrest shareholders at a plan Meeting in September or October 2023.
In due course, Newcrest stockholders will receive a Scheme Booklet. The Scheme Booklet will include information about the Newmont Transaction as well as an Independent Expert’s Report on whether the Newmont Transaction is in Newcrest shareholders’ best interests. Grant Samuel & Associates Pty Ltd has been selected as the Independent Expert by the Newcrest Board.
The Scheme is projected to be implemented by the end of 2023 if the Newmont Transaction is approved by Newcrest shareholders and the other conditions precedent are met or waived.
