March 22, 2019 / 8:25 PM / 3 months ago

Top shareholders express concerns over parts of Newmont-Goldcorp deal

TORONTO, March 22 (Reuters) - British Columbia Investment Management Corp (BCI) and Van Eck International Investors on Friday joined a growing chorus of shareholders expressing concerns about elements of Newmont Mining's $10 billion takeover of Goldcorp Inc.

BCI said in a statement it will vote its Goldcorp shares against the deal, as it opposes the proposed $12 million retirement allowance the company intends to pay its Chairman Ian Telfer when the deal closes.

VanEck is undecided on its vote but opposes the share of synergies from a recently announced joint venture between Newmont and Barrick Gold Corp that Goldcorp shareholders would receive, portfolio manager Joe Foster told Reuters.

Newmont made a friendly offer in January for Goldcorp in what would be the gold sector's biggest-ever takeover transaction, a bid to create the world's largest gold producer.

Barrick abandoned its own hostile bid for Newmont after Newmont agreed this month to combine its assets in Nevada with Barrick's. Barrick's takeover bid had included the caveat that the Newmont-Goldcorp deal not proceed.

"BCI finds this decision (on Telfer's compensation) to be fundamentally misaligned with the interests of shareholders who have experienced a significant destruction of almost 53 percent in value since 2006," Daniel Garant, BCI's senior vice president for public markets, wrote in the statement.

BCI is analyzing the ballot for the Newmont vote and will disclose its proxy votes ahead of the shareholder meeting on April 11 on its website, a BCI spokeswoman said. Goldcorp's shareholder vote will be on April 4.

Foster too expressed concern about the payment to Telfer, saying it is not up to shareholders to fund executives' "lavish lifestyles" and urged the company to scale back "outrageous payouts."

But "at the end of the day, I hope the deal goes through," he said, adding he expects the companies will respond to the concerns. "Newmont is getting the Goldcorp assets at a good price, and Newmont's management has the skills to create value from these assets."

The comments come on the heels of a letter from Paulson & Co. to Newmont on Thursday, saying it would vote against the company's takeover of Goldcorp, as it transfers too much of the benefit of both the combination and the joint venture with Barrick to Goldcorp.

Worries about the deal weighed on Goldcorp's shares, which dropped as much as 4.8 percent and closed down 2.9 percent at C$14.51 in Toronto. Newmont shares, which earlier fell 2.2 percent, ended the day up 0.5 percent at $34.50 in New York, compared with the NYSE Arca Gold Miners index's 0.1 percent gain. (Reporting By Nichola Saminather; Editing by David Gregorio)

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