Van Eck Associates Corp., one of Newmont Mining Corp.'s largest investors, wants the terms of the proposed US$10 billion takeover of Goldcorp Inc. renegotiated, saying it would move away significant gains from the Nevada joint venture with Barrick Gold Corp., The Wall Street Journal reported March 22, citing Van Eck Portfolio Manager Joe Foster.
Foster said he does not believe that "Goldcorp shareholders are entitled to the synergies of the Newmont Barrick" joint venture but does not want the deal with Goldcorp to be abandoned altogether.
Earlier this month, Paulson & Co. Inc., another significant Newmont shareholder, said it would not support the miner's proposed acquisition, claiming it would only benefit Goldcorp shareholders. Van Eck and Paulson do not have a large enough stake in Newmont to block the deal on their own, according to the Journal.
Moreover, certain investors in favor of the Goldcorp deal may not want to postpone it through renegotiation.
Mining analyst Adam Graf from B. Riley FBR Inc. criticized the current deal, saying it is "giving away too much value" by issuing so many shares to Goldcorp holders.
Graf added that although the two companies expect to generate US$365 million through more efficient mine management, "the synergies will largely accrue to Goldcorp shareholders."
Investors in Goldcorp and Newmont will vote on the deal in April.
Paulson estimated Newmont shareholders would lose about 35% of the planned gains from its Nevada joint venture to Goldcorp shareholders under the current merger agreement and said the 17% premium Newmont is offering Goldcorp shareholders is "unjustified" given Goldcorp's record of "poor performance."
British Columbia Investment Management Corp. recently said it will vote against the takeover, mainly due to the "egregious payout" Goldcorp Chairman Ian Telfer stands to get once the deal is sealed.