Vancouver — Barrick Gold (ABX-T, ABX-N) has again extended its takeover bid for NovaGold Resources (NG-T, NG-X), pushing back the expiry date for the offer until Oct. 24.
The gold major remains steadfast on the pricing of its all-cash offer, unchanged at US$14.50 per share. Given NovaGold’s 91.6 million shares outstanding, Barrick’s bid values the company at just over US$1.3 billion (about US$1.5 billion on a fully diluted basis).
“We believe (our offer) should be substantially more attractive to NovaGold shareholders today than when it was announced in late July,” said Barrick president and CEO Greg Wilkins. “Barrick’s premium all-cash offer has insulated NovaGold shareholders from recent declines in gold prices and gold equities.”
In announcing its bid extension, the senior also reviews the roughly US$40-per-oz. drop in the gold price and 7% slide in the XAU Gold and Silver Index since it first tabled its offer. Additionally, Barrick points out NovaGold has not attracted any other suitor, nor has it demonstrated any value increase for its mineral projects.
Barrick also claimed that the recently released preliminary economic assessment on the Donlin Creek project in Alaska used “very optimistic assumptions” that could not be supported in a full feasibility study. The company further speculated that in the absence of its takeover offer, shares of NovaGold would reasonably be expected to retreat to less than US$11.00 per share.
In response to the Barrick announcement, NovaGold president and CEO Rick Van Nieuwenhuyse said, “Holders of more than ninety-nine per cent of our shares continue to solidly reject Barrick’s US$14.50-bid as wholly inadequate.”
In its new release, Barrick disclosed that 173,682 NovaGold common shares had been tendered as of Oct. 13 under its takeover offer.
Closing at $17.46 per share following announcement of the extension, NovaGold continues to trade at a slight premium above the hostile bid price.
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