Vancouver — With the clock ticking down on its US$16.00-per-share bid for control of NovaGold Resources (NG-T, NG-X) at presstime, Barrick Gold (ABX-T, ABX-N) appears likely to become nothing more than a major shareholder in the advanced junior, which holds significant gold and copper projects in Alaska and Western Canada.
The testy battle between the two camps saw Barrick start its hostile takeover bid last summer, initially offering US$14.50 per share, then raising it to US$16.00 in late October. Realizing it was unlikely to reach its minimum 50.1% tender condition, the major then waived that requirement, hoping for a controlling interest in the company.
Despite extending the expiry date several times, Barrick’s “best and final offer” was set to expire on Dec. 6, with the senior stating there would be no further extensions. “We have fully evaluated NovaGold and determined that $16.00 (U.S.) per share is a full and fair offer price,” said Greg Wilkins, Barrick president and CEO. “We are announcing that Dec. 6 is the final expiry date, so NovaGold shareholders will know in advance that this is their last opportunity to tender.”
“The Barrick bid is ending as it began more than four months ago — hostile and inadequate,” countered Rick Van Nieuwenhuyse, president and CEO of NovaGold.
“By announcing its hostile bid in July, Barrick chose to break off the good faith discussions that were under way to resolve Barrick’s inability to meet the contract terms at Donlin Creek.”
NovaGold believes that Barrick will fail to meet contractual back-in requirements (spending of US$32 million, completion of a bankable feasibility study and a decision to begin mine construction by Nov. 12, 2007) to earn an additional 40% in the large western Alaskan gold deposit. NovaGold currently has a 70% interest in the deposit with Barrick holding the rest.
Barrick denies that there were any discussions between the two companies regarding a possible “friendly acquisition” transaction and added that it has no intention of engaging in such discussions.
The major reports it owns about 14% of NovaGold and said it would announce its final shareholdings after its bid expired. Barrick is expected to emerge as the largest single shareholder in NovaGold.
At presstime, shares of NovaGold traded at around $18.33 on the TSX and US$16.07 on AMEX, only slightly higher than Barrick’s offer price.
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