UPDATE 2-Barrick proposal to acquire Newmont hits roadblock -sources

Mon Apr 21, 2014 6:09pm EDT
 
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(Updates share prices, adds Breakingviews link)

By Euan Rocha

TORONTO, April 21 (Reuters) - Talks between Barrick Gold Corp and Newmont Mining Corp about a potential merger have hit a snag, but sources close to the situation say the companies remain keen to reach 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 under which Toronto-based Barrick would acquire Denver-based Newmont in an all-stock deal, said one source close to the matter.

That source said the deal would offer Newmont shareholders a slight premium to its current share price. Newmont shares rose 6.4 percent to close at $25.05 on the New York Stock Exchange, while Barrick's shares edged down 78 cents Canadian to C$19.03.

The sources, who asked not to be named due to the sensitive nature of the situation, said the talks have stalled over the issue of the spin-out of some assets from the combined entity, which is among the hurdles to a deal.

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

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

Barrick and Newmont declined to comment on the matter.   Continued...