UPDATE: Lihir Encouraged By Results Of Rival Bidder Search
05 Maio 2010 - 2:00AM
Dow Jones News
Lihir Gold Ltd. (LGL.AU) Chairman Ross Garnaut said Wednesday
that the company got "encouraging results" testing the market for
alternative bidders to Newcrest Mining Ltd. (NCM.AU) but a number
of analysts say a rival offer isn't likely to emerge.
Lihir yesterday endorsed a sweetened A$9.5 billion takeover
offer from Newcrest and reserved the right to continue existing
discussions with potential rival bidders until June 8.
"That exercise produced encouraging results and is continuing,"
Lihir Chairman Ross Garnaut said in prepared speech notes for the
group's annual general meeting.
Garnaut said Tuesday that the discussions, with more than one
party, are at "various stages".
Both Newcrest and Lihir are considered possible takeover targets
as uncertainty in global equities markets enhances the appeal of
safe haven assets like gold.
Some potential rival bidders' shares are trading at multiples
much lower than Lihir and Newcrest, possibly making an offer harder
for them to afford.
"We think the probability (of a rival bid) is low due to
relative valuations that could make acquiring Lihir difficult for
other gold companies," Morgan Stanley said, echoing comments made
Tuesday by Citigroup.
North American gold giants Newmont Mining Corp. (NEM), Barrick
Gold Corp. (ABX) and South African gold miner AngloGold Ashanti
Ltd. (AU), cited by analysts as possible suitors for Lihir,
declined to comment on whether they are interested in the
company.
Deutsche Bank said: "Given the strategic and logistical logic
being the proposed Newcrest, Lihir deal we see it being implemented
as the most likely outcome."
Macquarie analysts noted that Garnaut made mention Tuesday of
the "highly complementary nature of Newcrest and Lihir".
A combination of the two groups will create a A$25 billion
company by market value with mines spread across Australia, Papua
New Guinea, Ivory Coast, Indonesia and Fiji.
Garnaut noted Wednesday that Newcrest already holds significant
assets in Papua New Guinea, and in Queensland, that "sit well" with
Lihir's operations in those countries.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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