Aussie gold miner Newcrest Mining Ltd
(ASX:NCM) says it believes its merger proposal for fellow gold miner Lihir Gold Ltd
(ASX:LGL) is both full and fair and says it is willing to discuss the proposal further with Lihir.
Newcrest is offering one of its shares for every nine Lihir shares plus 22.5 cents cash per Lihir share, less any interim dividend declared by Lihir for the half year ending June 30, 2010.
Lihir rejected the company’s offer stating that it undervalues its assets and future growth potential.
In a letter to shareholders Newcrest says that there is compelling logic in combining the two companies, which would result in Newcrest shareholders owning around 65% of the combined organisation.
The gold miner has a market cap of around $24.5 billion and minimal net debt of $200 million.
However, Newcrest says that while the logic to combine the two companies is compelling, it is not critical to its future growth.
Newcrest says it will only pursue the proposal if it believes it will create value for its shareholders and is supported by both Newcrest and Lihir shareholders.
Newcrest Mining posted profit of $248.1 million for the year to June 30, 2009.
