UPDATE: Newcrest Mining Wants Access To Lihir Gold Data Room

Newcrest Mining Ltd. (NCM.AU) on Tuesday said it wants access to target Lihir Gold Ltd.'s (LGL.AU) data room to do further due diligence on the Papua New Guinea-based gold miner and is willing to alter the structure of its A$9 billion-plus offer.

In a letter sent to Lihir Gold's Chairman Ross Garnaut and to the Australian Stock Exchange, Newcrest Mining Chairman Don Mercer said that his group has spent the past two weeks talking to shareholders, many of whom are also Lihir investors, about its bid and the response has been "very positive and supportive".

"Our consultations also confirm our view that the terms of our revised proposal are full and fair," he said, although added Newcrest is prepared to improve its offer structure by ensuring shareholders who want more shares and less cash, or vice-versa, have that option through a "mix and match" structure and was prepared to discuss its proposal further with Lihir.

Lihir earlier this month rejected Newcrest's offer, pitched at one Newcrest share for every nine Lihir shares plus 22.5 Australian cents cash per Lihir share. Lihir rejected that as not reflecting the value of the company's assets or offering a sufficient control premium.

Mercer said that Newcrest had already improved its offer before the bid was made public.

"Following our approach in February, Newcrest made its offer unambiguously financially compelling by increasing our offer value by over A$1 billion in our revised March 29 proposal after considering the limited information covered during a two day due diligence," Mercer said.

A soaring gold price has seen both Newcrest and Lihir tipped as potential takeover targets for offshore gold majors who are looking to replace reserves, and analysts have said that said Barrick Gold Corp. (ABX), Newmont Mining Corp. (NEM) and Anglo American Plc (AAL.LN) were among those who could potentially intervene in the takeover tussle.

Lihir Gold last week said it had appointed Macquarie Capital Advisers and Greenhill Caliburn to help it assess a range of strategic options and Mercer noted that Lihir had indicated a data room has been prepared to assist potential acquirers.

"We would reasonably expect to be given access to that data room to assist our ongoing review," Mercer said in his letter.

"We assume that other parties require a formal proposal in order to be given access to due diligence and request your confirmation that no other parities have been or will be given due diligence on terms more advantageous than afforded to Newcrest," Mercer wrote.

But he said any deal was not vital to Newcrest, and warned that recent gains in Lihir's share price may be at risk if Newcrest's proposal does not go ahead.

"We have said consistently that the Lihir opportunity is compelling but not vital to Newcrest," Mercer said.

-By Lyndal McFarland, Dow Jones Newswires; 61-3-9292-2093; lyndal.mcfarland@dowjones.com

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