A group led by T. Boone Pickens Jr. yesterday took its bid for Newmont Mining Corp. to the company's stockholders, offering them $95 a share -- a total of $2.7 billion -- for a controlling interest in the mining and energy concern.
And Pickens said that if his group gains control of Newmont, it plans to sell most of its assets, a tactic some analysts had expected as a means of paying for the deal and realizing a quick profit.
The hostile takeover offer, which is conditioned on Pickens' group receiving enough financing to pay for the stock, increases pressure on Newmont's management to respond to a $5.7 billion "friendly" takeover offer made by the Pickens group last week.
Newmont, which had no comment yesterday, has scheduled a board meeting for later this week to consider the earlier offer.
Newmont's stock rose $1.87 1/2 to $90.25 in active trading yesterday.
In its latest bid, Pickens' group, Ivanhoe Partners, is seeking 28 million shares of Newmont stock. Together with the 6.6 million shares of Newmont already held by the group -- which includes a variety of investors -- Pickens could gain control of 52 percent of Newmont's stock if the offer is successful. Ivanhoe then would acquire the remaining Newmont stock through "a transaction or series of transactions" equal to $95 a share in cash, according to a statement issued by the group. Pickens could not be reached for comment.
The offer is to expire Oct. 5, and will be valid only if Pickens gets commitments from shareholders for the 28 million shares and if financing for the deal is secured. The Pickens group said it would put up $600 million of the money required and that the rest would be raised by investment banker Drexel Burnham Lambert, which was said to be "highly confident" of its ability to assemble to financing. Any sale of Newmont's assets following a takeover would likely be used to pay off debt incurred in buying the company, analysts say.
The tender offer to shareholders soon after a bid to management for a friendly deal follows the pattern of Pickens' previous takeover gambits, virtually all of which have ended with his investor group making a huge profit on its initial stock holding when the target company either bought out the group or was taken over by another suitor.
Some analysts have suggested that Pickens is attempting to play the same game with Newmont, especially since the bid for the company represents the Amarillo, Tex.-based raider's first major foray outside the oil business.
But other analysts see Pickens' interest in Newmont as genuine, speculating that he might hope to take over the company and then liquidate it for a quick profit. The $95-a-share price is close to what analysts believe is the book, or "break-up," value of the New York-based company, which has interests in gold, coal, oil and metals mining.
In a filing with the Securities and Exchange Commission yesterday, the Pickens group said that it would sell or restructure most of Newmont's assets if it succeeds in taking over the company. Among other things, the group said it hoped to sell Newmont's $1 billion in marketable securities, its oil and gas holding and an Australian gold-mining operation.
Whatever Pickens' motives, his pursuit of Newmont could be complicated by the actions of the company's biggest stockholder, Consolidated Gold Fields PLC, a British firm that owns 26 percent of Newmont. That large block of stock could give Consolidated virtual veto power over any attempt by Pickens to gain control, analysts say, and some have speculated that Consolidated might either buy additional stock in Newmont or assemble a consortium of companies to take over Newmont