Barrick Gold Corp., the Canadian mining giant, has amassed a small stake in U.S. rival Newmont Mining Corp. and warned the company that it plans to propose changes to its bylaws, as it continues to weigh a hostile takeover attempt, according to people familiar with the matter.
On Friday, a letter was delivered to Newmont’s Greenwood Village, Colorado, headquarters informing the board that Barrick, through a wholly-owned subsidiary, had acquired 1,000 shares in Newmont, said the people, who asked not to be identified because the details aren’t public.
Barrick plans to propose a reduction in the amount of shares needed to call a special meeting at the miner, lowering it from 25 per cent to 15 per cent, according to the letter.
Such a meeting could be used to vote out members of Newmont’s board. The letter also said Barrick would call for the introduction of a bylaw that would stifle efforts by Newmont to improve its takeover defenses, the people said.
Barrick’s stake is worth about US$36,000, or much less that 1 per cent of Newmont’s total outstanding stock, according to data compiled by Bloomberg. It’s unclear whether the Toronto-based miner plans to increase its stake.
Newmont views the letter and proposals as a ratcheting up of hostility on the part of Barrick, which on Friday confirmed it had been considering an all-stock, nil-premium takeover of its rival.
A representative for Newmont declined to comment. Spokespeople for Barrick didn’t respond to requests seeking comment.
If approved at Newmont’s 2019 annual meeting, the reduction in the proportion of shares needed to call a special meeting would mark a significant boost to Barrick in a hostile takeover effort. It could also see BlackRock Inc. emerge as a linchpin in any battle for control between the miners.
The world’s largest asset manager owns 14.9 per cent of Newmont and 4.3 per cent of Barrick, according to data compiled by Bloomberg. It is also the largest holder in GoldCorp Inc. -- which agreed in January to sell itself to Newmont for US$10 billion -- with 7.2 per cent of shares.
Newmont, which paid a 17 per cent premium for Goldcorp, has maintained that the deal will deliver significant benefits to its own shareholders, providing a geographically diversified portfolio of mines and annual pretax synergies of US$265 million.