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 October 24th.
The gold major remains steadfast on pricing of its all-cash offer price, 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. Barrick’s premium all-cash offer has insulated NovaGold shareholders from recent declines in gold prices and gold equities,” stated Barrick president and CEO Greg Wilkins.
In announcing its bid extension, the senior also reviews the approximate 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 states NovaGold has not attracted any other suitor nor has it demonstrated any value increase for its mineral projects.
Barrick also challenges 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 return to the sub-US$11.00 per share level.
In response to the Barrick announcement, NovaGold’s president and CEO Rick Van Nieuwenhuyse commented “Holders of more than 99% of our shares continue to solidly reject Barrick’s US$14.50 bid as wholly inadequate.”
Barrick disclosed that 173,682 NovaGold common shares have been tendered as of October 13th under its 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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