Barrick boosts NovaGold bid by 10 per cent to $ 1.71B U. S.
TORONTO • Barrick Gold Corp., the world’s biggest gold producer, boosted its hostile takeover offer for NovaGold Resources Inc. by about 10 per cent to $ 1.71 billion U. S., which the company said was its “ best and final” bid.
The cash offer was raised to $ 16 a share from $ 14.50 and the deadline for NovaGold shareholders to accept the bid was extended a fourth time to Nov. 7, Toronto- based Barrick said yesterday in a statement. Barrick needs 50.1 per cent of the shares to proceed with its takeover of Vancouver- based NovaGold.
Gold producers are making more takeover bids after bullion prices surged to a 26- year high and new reserves became harder to find. Barrick became the largest gold producer in March with its $ 10- billion acquisition of Placer Dome Inc. Shares of NovaGold rose 3.9 per cent yesterday to $ 15.65 in New York.
“ Barrick’s going to start to get some stock in this tender process based on the fact that the stock price is not trading above the tender offer now,” said Sprott Securities analyst David Stein, who rates NovaGold a “ market perform” and doesn’t own any shares.
“ Whether it’s enough to get 50 per cent or not, that’s a tough call.”
On the Toronto Stock Exchange, NovaGold rose 64 cents, or 3.8 per cent, to $ 17.67 Cdn, giving the company a market value of $ 1.89 billion Cdn based on 106.7 million fully diluted shares outstanding.