Newcrest share price slips as exclusivity period for $32b takeover extended

The gold company has given its suitor an extra week to comb through its books.

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Key points

  • The Newcrest share price dipped at the open on Friday, dropping 1.4% to trade at $28.49
  • It comes on news the company has extended the exclusive due diligence period offered to US-listed gold miner Newmont
  • Newmont put forward an all-scrip bid representing a $32.87 per share offer price for its ASX 200 counterpart last month

The Newcrest Mining Ltd (ASX: NCM) share price is in the red after the S&P/ASX 200 Index (ASX: XJO) gold icon extended the exclusivity period offered to suitor, Newmont Corporation (NYSE: NEM).

Newmont offered to acquire its ASX 200 counterpart in February, but its bid was rejected by its Aussie rival. It later upped its all-scrip offer to an implied price of $32.87 per share.

The Newcrest share price slipped on open and is trading 1.38% lower at $28.49 in early morning trade.

Let's take a closer look at today's news of the $32 billion takeover facing the ASX 200 gold producer.

ASX 200 gold giant extends exclusivity period

The Newcrest share price is falling after the company announced Newmont will have an extra week to comb through its books.

Newmont will now have until 18 May before submitting a binding offer or losing its forfeiting its exclusivity. That is unless the period is extended further.

The US-listed rival-turned-suitor is said to have substantially completed its due diligence.

Newcrest investors have been offered 0.4 Newmont shares for each stock held in the ASX 200 gold company. That offer was declared best and final by the acquisition hopeful.

That represents an implied value of $32.87 per share and an enterprise value of $32 billion for the mining giant. Newcrest had a $25.8 billion market capitalisation as of Thursday's close.

The offer also allows the ASX 200 gold share to pay a fully franked special dividend of as much as US$1.10 per share.

If the tabled acquisition goes ahead, Newcrest shareholders will walk away with a 31.1% ownership in Newmont.

Newcrest share price snapshot

The Newcrest share price has had a ripper run as of late.

The stock has gained 38% since the start of 2023. It's also 17% higher than it was this time last year.

In comparison, the ASX 200 has lifted 4% year to date and 4% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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