Aug 9, 2019
In the July 2019 issue of Lexpert Magazine, legal affairs writer Sandra Rubin takes a close look at recent deals involving top global gold producers and the jungle-like atmosphere that prevails in the industry. In particular, she examines the negotiations leading up to the acquisition of Goldcorp Inc. by Newmont Mining Corp., which included a failed all-share hostile bid for Newmont initiated by mining giant Barrick Gold Corp. To oversee the friendly Newmont transaction, Goldcorp formed a special committee of independent directors and Osler was retained to advise the committee. In the article, Alex Gorka, an Osler corporate partner who was on the deal team, explains that the timelines were so tight on the transaction that they went “from zero to 100 in a heartbeat.”
In addition to the quick turnaround times, Alex explains that Goldcorp had to focus on ensuring that there were deal protections in place in anticipation of potential competing offers. He says that the company’s special committee “saw this as a transformative moment in the gold industry and felt Barrick was unlikely to simply sit it out.”
“With a high likelihood of an interloper such as Barrick emerging, we knew the deal protections had to be right. They had to be perfect.”
When Barrick launched its US$18-billion zero-premium hostile bid, Alex explains that the “robust” deal-protection package that was in place gave Goldcorp “a meaningful seat at the table in the Barrick-Newmont discussions.”
Ultimately, Newmont’s board decided that the deal with Goldcorp was in shareholders’ best interests and Barrick’s hostile bid was rejected. Newmont and Barrick instead entered into a joint venture for combining assets in Nevada.
Read Sandra Rubin’s full article, “Then ‘the alligator emerged’” in the July 2019 issue of Lexpert Magazine to learn more about these significant transactions.