Newmont Tries to End Revolt Over Goldcorp Deal With Special Dividend -- 3rd Update

By Alistair MacDonald 

Newmont Mining Corp. will issue a special dividend in an effort to quash a brewing shareholder revolt that threatened the company's takeover of Goldcorp, a deal that will create the world's largest gold miner.

Two large Newmont shareholders said last week that the company's $10 billion merger with Goldcorp transferred significant gains away from a recently announced Nevada joint venture between Newmont and Barrick Gold Corp. The January merger deal was struck before the Nevada agreement.

On Monday, Newmont said it would pay 88 cents a share to its own investors if the Goldcorp deal is approved by both companies' shareholders next month.

The move reflects feedback from investors, Tom Palmer, Newmont's chief operating officer, said in an interview. "The special dividend allows us to pass on the full after-tax synergies that would have gone to the Goldcorp investors," he said.

Newmont estimates that the Nevada joint venture will result in cost savings of $4.7 billion, but those savings will be split between Newmont and Barrick's shareholders.

Paulson & Co., a major Newmont shareholder, said Monday that the dividend is a step in the right direction and it will longer oppose the merger. The hedge fund sent a letter to Newmont Chief Executive Gary Goldberg last week saying the Goldcorp deal needed to be renegotiated. VanEck, one of Denver-based Newmont's largest investors, backed that sentiment several days later.

Investors also have criticized the size of postdeal compensation for Goldcorp's current chief executive and its chairman.

Mr. Palmer said this was a matter for Goldcorp, which didn't immediately respond to a request for comment.

Goldcorp declined to comment.

--Jacquie McNish contributed to this article.

Write to Alistair MacDonald at [e-mail]

(END) Dow Jones Newswires

March 25, 2019 16:47 ET (20:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.