LGL Rejects Acquisition Proposal From Newcrest Mining Ltd
31 Marzo 2010 - 5:19PM
Marketwired
Lihir Gold Ltd (LGL) (TSX: LGG)(ASX: LGL)(NASDAQ: LIHR) has today
rejected an offer from Newcrest Mining Ltd to acquire 100% of LGL's
issued ordinary shares through a scheme of arrangement.
The offer, which was received on 29 March 2010, was on the basis
of 1 Newcrest share for every 9 LGL shares plus A$0.225 cash per
LGL share, less any interim dividend declared for the half year
ended June 2010. Based on Newcrest's closing share price as at 31
March 2010, the offer was equivalent to A$3.87 per share and valued
the company at approximately A$9.2 billion.
While the Board recognized the strategic merits of the
combination of the two companies, following careful review and
analysis, directors unanimously determined that the offer did not
represent good value for LGL shareholders. This was particularly
the case given the conditions and exclusivity arrangements that
Newcrest proposed.
LGL Chairman Ross Garnaut said the offer undervalued LGL, both
in terms of its existing business, and in terms of the potential
value the company expected to deliver to shareholders in the
future. "It also did not include a sufficient premium for control,"
Dr Garnaut said.
"Directors and management made certain that Newcrest was given
the opportunity to make an offer that would deliver full value for
our shareholders, but the Board's assessment was that the offer
ultimately received was inadequate. We felt we had an obligation to
shareholders to reject the offer," he said.
In the course of discussions leading to the offer, LGL provided
Newcrest with access to limited due diligence items. The due
diligence was subject to a confidentiality deed and 9 month
standstill agreement and gave Newcrest an opportunity to put
forward an offer that LGL's Board may have considered to be in the
interests of shareholders.
"LGL has an excellent portfolio of operating mines in three
countries and has achieved record production outcomes every year
for the last four years, reaching output of 1.124 million ounces in
2009. We have major growth projects currently being developed in
PNG and in West Africa, which will deliver increasing returns over
the coming years, lifting average annual gold production by
approximately 40% from current levels to 1.45 million ounces from
2012 to 2016.
"There is considerable option value in the huge gold resource at
Lihir Island, which increased 31% to 43 million ounces in 2009, and
also in the company's assets in West Africa.
"We were keen to ensure that our shareholders capture the full
value of that growth," Dr Garnaut said.
"The Board is strongly of the view that LGL is undervalued in
the marketplace, and that view has been expressed to us on a number
of occasions by shareholders. We have recently made management
changes and taken other steps that will assist us in the process of
rebuilding market confidence and correcting that valuation
shortfall.
"In that context, it was clear to the Board that the Newcrest
offer failed to provide full value for the underlying assets with
an appropriate takeover premium," Dr Garnaut said.
"The world class, long life nature of LGL's pure gold assets
would add a great deal to the value of Newcrest, as it would to
some other companies, and the offer price did not provide an
appropriate sharing of the potential benefits of the proposed
combination," Dr Garnaut said.
For relevant details of the company's recent performance, please
see Appendix One.
LGL's Board remains committed to maximising value for its
shareholders and this will continue to be the only criterion by
which any further proposals or strategic options will be
evaluated.
LGL will keep the market informed of further developments as
appropriate.
To view Appendix One, please visit the following link:
http://media3.marketwire.com/docs/lgg331appendix.pdf
ARBN 069 803 998
Contacts: Lihir Gold Ltd Joe Dowling GM Corporate Affairs +61
421 587755 Lihir Gold Ltd Josie Brophy Corporate Communications
Manager +61 7 3318 3317 Caliburn Partnership Richard Phillips +61 3
9935 6806 Cheryl A. Martin North American Investor Relations
303-386-4586 cmartin@martincorpcom.net
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