Already the world’s largest gold producer by market value and ounces produced, Newmont would become a gold mining behemoth should it prevail in its bid for Newcrest. The newly combined company would produce nearly twice as much of the yellow metal as closest rival Barrick Gold Corp.
News of the deal leaked early Monday in Australia before Newmont had a chance to do full due diligence, but the company is convinced the tie-up would be successful, according to the source. Newmont would be willing to slightly increase its offer and is not worried about being outbid, the source added.
Shares of Newmont fell 4.5% to close Monday at $47.60. Analysts at Jefferies cut their target on Denver-based Newmont by 12% to $50 on the prospects of a bidding war.
Flossbach von Storch, the Germany-based asset manager and Newmont’s eighth-largest shareholder, agreed that the two companies would fit well together but said that it was not in favor of Newmont increasing its…