VANCOUVER - The directors of PLACER DOME have unanimously recommended that its shareholders reject the hostile takeover bid from BARRICK GOLD of Toronto.
"We believe Barrick's offer is financially inadequate, opportunistic, and fails to recognize the value of Placer Dome's assets and long-term growth profile," said Robert Franklin, chairman of the Placer Dome board." It appears Barrick needs to address a projected decline in its gold production and the negative consequences of its hedging strategy, but we fail to see how the Barrick offer serves the long-term interests of Placer Dome shareholders."
The board cited many other reasons for rejecting Barrick's offer. A few of them are: the offer is highly conditional; the value of the deal is dependent on the price of Barrick shares; there is a risk that Barrick's Pascua Lama gold project may not be developed in a timely fashion; the sale of Placer Dome's Canadian assets to GOLDCORP would not reflect the maximum value of the mines; and better offers may emerge.
The industry's rumour mill is again in high gear, speculating about what company could make a better offer for Placer Dome. Toronto-based Resource Investor (www.ResourceInvestor.com) published a report that Placer Dome and Newmont have signed a confidentiality agreement allowing Newmont to examine Placer's assets. We will keep our readers informed if this rumour becomes fact.