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LIHIR Gold Limited (LGL) has agreed to an increased $9.5 billion acquisition offer from Newcrest Mining Limited (NCM), hinting that a third party could be involved in negotiations.
Lihir turned down the last offer at $3.87 per share equating to around $9.17b. Based on recent prices the latest offer values Lihir at around $4.03 per share.
It includes one Newcrest share for every 8.43 Lihir share as well as $0.225 cash per share, but shareholders will have the option to maximise the scrip or cash component.
Lihir chairman Ross Garnaut, remained tight lipped regarding advanced negotiations with a touted third party.
He says shareholders will receive an attractive premium from the deal while participating in the benefits of the combined company, which would be the largest gold company in the Asia-Pacific region and the fourth biggest in the world.
“This proposal delivers a lot of confidence for shareholders, and the attractive company that is created by having these assets brings substantial upside,” he says.
“It was very important to Lihir directors that we were able to continue the competitive process that commenced a few weeks ago.”
On the issue of the Henry Tax Review, Garnaut says discussions so far have been in terms of a ‘worst case scenario’ and that it was unlikely to affect value significantly.
Newcrest chairman Don Mercer says the combined company would have a combined annual output of 2.8 million ounces.
“The combined organisation will be Asia-Pacific’s leading gold producer, with a standout portfolio of long-life, high margin, tier one gold assets,” he says.
A shareholder meeting has been set for late July.
LGL shares increased by 4.6 per cent this morning to $3.84 per unit.
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