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Thursday, 24th November 2005 (4282 views)

The board of Canadian gold mining giant Placer Dome has branded rival Barrick's hostile take-over attempt as "financially inadequate" and has urged shareholders to reject its $9.13 billion bid.

Barrick would become the world's largest gold producer with an annual production of 8.4 million ounces if its bid were a success.

It is currently the globe's third largest gold mining outfit and would like to get its hands on Placer - Canada's second biggest producer - in order to shore up its gold reserves as the yellow metal's price hits an 18-year high.

But Placer's board argue the bid does not represent shareholder interest.

"We believe Barrick's offer is financially inadequate, opportunistic, and fails to recognise the value of Placer Dome's assets and long-term growth profile," commented Placer's chairman of the board, Robert Franklin.

It hit back at its aggressor, arguing that its gold production is on the up while Barrick's is in decline.

"It appears Barrick needs to address a projected decline in its gold production and the negative consequences of its hedging strategy," added Mr Franklin.

Vancouver-based Placer said it was looking into a range of alternatives and had contacted or been approached by a number of other companies regarding possible alternative transactions.

 

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