'Maybe we need more M&A': B2Gold CEO
If there’s one big takeaway from mining’s megamerger mania, it’s that the days of big premiums are over, according to the chief executive of B2Gold Corp. (BTO.TO)
In an interview with BNN Bloomberg’s Andrew Bell Thursday, Clive Johnson noted that Newmont Mining Corp.’s US$10-billion takeover of Goldcorp Inc. and Barrick Gold Corp.’s US$5.4-billion acquisition of Randgold Resources Ltd. did not come with premiums.
“I like that for a couple of reasons,” Johnson said. “The big premium days are over, when companies are going to pay 30-plus per cent to take over other companies. … Companies [often] historically overpaying – that’s one of the problems in the sector.”
Johnson added that while this minimizes the threat of a mining major swooping in to offer a huge premium for B2Gold, it also opens the door for more M&A for his own firm.
“Perhaps later on, as we go through the year, we’ll be looking at potentially accretive M&A because now the big premiums have gone away,” Johnson said.
Another problem the mining industry faces, according to Johnson, is how large compensation packages are negatively affecting the sector. Johnson’s comments come as Goldcorp faces criticism for a lucrative US$12 million “retirement allowance” that its chairman, Ian Telfer, is set to receive if the miner merges with Newmont.
“I’ll just talk historically [and] generally, but I’m disappointed with the compensation packages, they’ve been over the top and it gives the industry a bad name,” said Johnson, who received total compensation of $5.5 million in 2017.
“Too often the gold mining industry hasn’t been run as a business. It’s been growth at any cost and excessive compensation. If we want to attract more investors, even non-gold investors, we have to be accountable.”