Barrick proposal to acquire Newmont hits roadblock-sources

Mon Apr 21, 2014 12:46am EDT
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By Euan Rocha

TORONTO, April 21 (Reuters) - The talks between Barrick Gold Corp and Newmont Mining Corp over a combination that would create a gold mining behemoth have hit a snag, but two sources close to the situation say the companies remain keen on a deal and discussions are likely to resume.

The talks had been on for a few weeks and the two sides had broadly agreed to a transaction that would see Barrick acquire Denver-based Newmont in an all-stock deal, said one source close to the matter, adding that the deal would offer Newmont shareholders a slight premium to its current share price.

The sources, who asked not to be named due to the sensitive nature of the situation, said the talks have hit a snag around the spin-out of certain assets from the combined entity, among other issues.

Following the close of the tentative deal, shareholders in the combined entity would also get shares in a new company that is likely to include assets in Australia and in New Zealand. But the final mix of assets in the spun out entity has not yet been agreed upon said one source, adding that new entity could include some assets from outside that region.

The companies are also contemplating selling certain non-core assets that are not included in the spun out new entity, said one source.

Barrick and Newmont declined to comment on the matter.

Sources said the two companies had been hoping to get a deal done this month ahead of the annual shareholder meetings at both companies, but that is now looking unlikely. Newmont's AGM is set for April 23, while Barrick's is being held on April 30.

The latest round of merger talks between the two companies, initially reported by the Wall Street Journal, mark the third time that the two miners with large overlapping operations in Nevada, have contemplated a merger within the last seven years.   Continued...