LIHIR OFFER NOT GOLD

Written on the 25 January 2011

APRIL 2010

Gold miner Lihir Gold Ltd (LGL) today rejected a takeover offer from Newcrest Mining, the same day it appointed former BHP executive Graeme Hunt as managing director and CEO.

The offer was based on one Newcrest share for every nine LGL shares plus $0.225 cash per LGL share, less any interim dividend declared for the half year ended June 2010. Based on Newcrest’s closing share price as at 31 March 2010, the offer was equivalent to $3.87 per share and valued the company at around $9.2 billion.

The LGL board unanimously agreed that the offer did not represent good value for shareholders.

LGL Chairman Ross Garnaut, says the offer undervalued LGL, both in terms of its existing business, and in terms of the potential value the company expected to deliver to shareholders in the future.

“It also did not include a sufficient premium for control,” he says.

“Directors and management made certain that Newcrest was given the opportunity to make an offer that would deliver full value for our shareholders, but the Board’s assessment was that the offer ultimately received was inadequate. We felt we had an obligation to shareholders to reject the offer.”

Garnaut says LGL remains undervalued in the marketplace.

“We have recently made management changes and taken other steps that will assist us in the process of rebuilding market confidence and correcting that valuation shortfall,” he says.

The appointment of Hunt to the top role follows the resignation of Arthur Hood in January.

A metallurgist by training, the 53-year-old spent 34 years with BHP Billiton. He left BHP in March last year as president of the iron ore division.

“LGL has great assets in three countries, a talented management team in place, and significant untapped potential,” says Hunt.


Latest News

WHY A JUNIOR MINER DECIDED TO JOIN THE RANKS OF THE HOT POT STOCKS

USUALLY, when a relatively unknown explorer experiences a sharp spike in its share price, it means they've fou...

1700 BRISBANE APARTMENTS NOW MANAGED BY FORTUNE 500 COMPANY JLL

MULTINATIONAL and Fortune 500 company JLL (NYSE: JLL) has expanded its Australian dominance in the property managemen...

HARVEY NORMAN HITS OUT AT 'FALSE NEWS' OF ASIC INVESTIGATION

RETAIL giant Harvey Norman (ASX: HVN) has vehemently rejected reports its accounts are under investigation by ASIC, s...

RARE GOOD NEWS FOR SLATER AND GORDON AS ASIC CLOSES INVESTIGATION

ASIC has cleared Slater and Gordon of deliberately falsifying its accounts after a three-month investigation.

It s...

Related News

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

CHINA CONTINUES TO COLLECT AUSSIE PROPERTY ASSETS

CHINESE coin continues to dominate Australia's offshore real estate investment market, accounting for almost h...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter