By Alec Hogg
In today’s business headlines
- South African mining boss and recently appointed Barrick CEO Mark Bristow yesterday launched gold mining’s biggest ever hostile takeover bid. Barrick is offering almost $18bn in an all share deal to acquire its North American rival Newmont. If successful, the deal would value the expanded group at $42bn, by far the world’s most valuable gold miner. But Newmont’s chief executive Gary Goldberg, who is set to retire this year, firmly rejected Bristow’s advances. Goldberg said the offer values his company at an 8% discount to its share price, claiming that no shareholder would be tempted given its superior performance record to that of Barrick. Goldberg said Newmont will instead continue with its own proposed $10bn acquisition of Canadian producer Goldcorp, a deal described as “desperate and bizarre” by Estcourt-born Bristow. Yesterday is the opening salvo of a looming showdown looms between gold mining’s two fiercest rivals. A potential merger in 2014 between Barrick and Newmont collapsed because of personality clashes between senior executives.
- Once universally admired American conglomerate General Electric last night announced a major step towards breaking into smaller chunks by agreeing the $21bn sale of its life sciences business – with more disposals planned. GE’s biopharma operations are being acquired by life sciences conglomerate Danaher, whose former CEO Larry Culp took over the top job at GE last October. Cash from this sale of one of GE’s fastest growing units will liquidate a fifth of the group’s $100bn debt. This will go a long way to fulfilling GE’s promise to raise $30bn from asset sales. Danaher is paying 17 times Ebitda and around ten times the biopharma unit’s revenues.
- Berkshire Hathaway chairman Warren Buffett admitted during an interview with CNBC yesterday his company overpaid when helping to buy food company Heinz in 2013 and then supporting its acquisition of competitor Kraft in 2015. Berkshire owns 27% of the merged Kraft Heinz, a stake which required it to account for a $2.7bn share of the food company’s 2018 losses. Buffett said Berkshire will not sell its stake in Kraft Heinz which it controls with Brazilian private equity partner 3G, because “we don’t pull the plug…it isn’t our style.” But he said Berkshire would not be buying any more shares in Kraft Heinz even after the stock price dropped 29% last week. As an aside, Buffett also told CNBC he would support fellow Democrat Michael Bloomberg if the media baron decided to enter the US presidential race in 2020.
- In South African related news, independent UK telecoms infrastructure business Helios Towers yesterday announced it will double up on its recent South African investment by building 1,000 towers in the country during the next three years. Helios’s acquisition last month of SA Towers brought it a pipeline of 500 urban sites ready for new towers. It plans to use a recently raised $100m loan to build these new telecoms towers in South Africa fitting them out for the introduction of 5G. The company, which has over 6,700 towers in Africa and dominates the market in the two Congos, Tanzania and Ghana, focused much of yesterday’s results presentation in London sharing its excitement about the recent entry into South Africa, where independents own just 10% of 30 000 towers that serve the biggest mobile phone market in the continent.
Visited 180 times, 1 visit(s) today
