Barrick’s Latest Move: IPO the Crown Jewels—But at What Price?
Following Barrick's (NYSE: B) announcement that the board has authorized management to explore an initial public offering of its Tier 1 North American gold assets, let's take a closer look at what the spinout would look like. The proposed “NewCo” would combine Nevada Gold Mines, Pueblo Viejo, and the wholly-owned Fourmile discovery into what could become one of the world’s largest pure-play gold companies.
The timing is not accidental. Barrick has been looking at options ever since it unceremoniously bid its CEO adieu--only days after he (finally) announced some good news after years of lackluster returns. Activist investor Elliott Management has also built a stake worth at least several hundred million dollars, putting it among Barrick’s top shareholders and increasing pressure for a breakup into more focused regional entities. Barrick under Bristow dreadfully under performed Gold and its peers by a wide mark over the last 5 years. (To be fair, $NEM also lagged after the Newcrest merger.) It wasn't until the end of Q2 --and after Bristow was ousted--that it finally caught up.
