Newmont offers special dividend to investors to back Goldcorp deal

By Nichola Saminather TORONTO (Reuters) - Newmont Mining Corp will pay a special dividend of 88 cents per share in an effort to soothe unhappy shareholders if they approve its $10 billion takeover of Goldcorp Inc, the company said on Monday. Facing protests from investors who say Goldcorp shareholders benefit too much from the deal, Newmont said the immediate cash payment would represent a portion of the savings from a separate agreement with Barrick Gold Corp. Newmont's friendly bid to buy Goldcorp to create the world's biggest gold producer preceded the agreement with rival Barrick to create a joint venture combining their operations in Nevada

Reuters March 26, 2019 01:05:42 IST
Newmont offers special dividend to investors to back Goldcorp deal

Newmont offers special dividend to investors to back Goldcorp deal

By Nichola Saminather

TORONTO (Reuters) - Newmont Mining Corp will pay a special dividend of 88 cents per share in an effort to soothe unhappy shareholders if they approve its $10 billion takeover of Goldcorp Inc, the company said on Monday.

Facing protests from investors who say Goldcorp shareholders benefit too much from the deal, Newmont said the immediate cash payment would represent a portion of the savings from a separate agreement with Barrick Gold Corp.

Newmont's friendly bid to buy Goldcorp to create the world's biggest gold producer preceded the agreement with rival Barrick to create a joint venture combining their operations in Nevada. Newmont offered 0.328 of its shares and 2 cents for each Goldcorp share.

Top Newmont shareholders including Paulson & Co and Van Eck International Investors said last week the Goldcorp proposal transferred to Goldcorp shareholders too much of $4.7 billion in synergies from the Barrick venture. Paulson said last week it would vote against Newmont's acquisition of Goldcorp.

"In the discussions I've had with a number of our large, long-term shareholders this morning, they're quite pleased with this outcome and are supportive of it," Newmont Chief Executive Gary Goldberg told Reuters on Monday.

A Paulson & Co spokesman said the firm is evaluating the announcement.

"We're very pleased with Newmont's decision," said Joe Foster, portfolio manager at Van Eck, Newmont's third-biggest shareholder. "Companies always claim they're going to create synergies. It's great to see Newmont putting their money where their mouth is and giving us a payout up front."

In an investor presentation earlier this month, Newmont said Goldcorp shareholders would get $600 million of the pre-tax synergies from the joint venture with Barrick.

"If one assumes this dividend payment of $469 million reflects the after-tax value of the JV that would have been previously shared with Goldcorp shareholders, it would appear to be fair," Josh Wolfson, managing director of metals and mining at Desjardins Securities, said by email.

Goldcorp shares jumped as much as 3.7 percent and were trading up 2.9 percent at C$14.93 on Monday afternoon in Toronto, erasing Friday's 2.9 percent loss. Newmont climbed 1.2 percent to $34.91, on track for its highest close in a month in New York trading.

Goldcorp said in a separate statement it supported the special dividend.

Also, Goldcorp said proxy advisory firm ISS recommended on Monday that its shareholders support Newmont's takeover offer when they vote on April 4. Newmont shareholders will vote on April 11.

(Reporting by Nichola Saminather; Editing by Bill Trott and Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.