Lexpert Magazine

14 LEXPERT MAGAZINE | JULY 2019 Lawyers for Newmont and Goldcorp scrambled to negotiate exclusivity and confidentiality agreements, dra an agree- ment-in-principle, and conduct regulatory analyses. ey also had to do due diligence, integrate legal and business diligence, and facilitate reciprocal diligence. A group from Newmont flew to Toronto to help move things along. Meetings could easily include 50 people, says May, "all, un- derstandably, with something to say." When news of the planned Newmont- Goldcorp US$10-billion deal surfaced, at Davies Ward Phillips & Vineberg LLP in Toronto, Melanie Shishler's phone started ringing "pretty quickly." Shishler is frequently lead counsel on Barrick's deals. She had led the team on the Randgold transaction. Newmont went public with its offer for Goldcorp. Jan 14 — just two weeks aer Randgold closed. Barrick was aware the transaction would leapfrog Newmont ahead and make it less likely it would be able to win access to Newmont's Nevada mines, which it had long eyed for the syner- gies with its own adjacent properties. Barrick and Newmont had talked a few times over the years but the two never seemed to have the right chemistry. Shishler called the relationship "a dance that never ends." IT WAS ABOUT TO. Once a friendly deal is announced, the time leading to a shareholder vote is a fraught period, with the transaction vulnerable to competing bids or activist intervention. May says no matter how busy you are trying to close a transaction, you have to be ready for an interloper. "You have to analyze the possibilities, what they might look like, and mentally prepare. If you're caught to- tally by surprise, there's a problem." And sure enough, one was lurking. Shishler's team was quietly working with Barrick's longtime US counsel at Cravath, Swaine & Moore LLP to pull together an all-share hostile bid for Newmont. Unaware of the hurricane forming, New- mont and Goldcorp debated whether Bar- rick might be too busy digesting Randgold to launch a competing offer. Gorka says Goldcorp's special committee "saw this as a transformative moment in the gold indus- try and felt Barrick was unlikely to simply sit it out." He says Goldcorp's top priority was get- ting deal protections in place. "With a high likelihood of an interloper such as Barrick emerging we knew the deal protections had to be right. ey had to be perfect." Newmont and Goldcorp came up with a robust package that included a US$650- million break fee, strong non-solicitation provisions, and interim operating covenants restrictive enough to prevent any major change to Newmont's business without Goldcorp's consent. So jaws did not hit the table when Feb. 25, Barrick unleashed its US$18-billion zero- premium hostile bid. To stick with the jungle analogy, says Ripley, "the alligator emerged." And there was a kicker. It wanted New- mont to spit Goldcorp out. Goldcorp was unhappy at the prospect. "We were equally offended and concerned," Ripley says. But Gorka says the robust deal- protection package that had been negotiat- ed gave Goldcorp "a meaningful seat at the table in the Barrick-Newmont discussions." May says a deep analysis of the Barrick bid forced everyone to turn their focus on a dime. Ultimately Newmont's board concluded the Goldcorp deal remained in shareholders' best interests. "So then you had to determine how to respond to the Barrick initiative," May says. "ere was a very intensive analysis whether to respond with a stiff arm, an olive branch or to prevent it from happening. It took up a very substantial amount of time." "There was a very intensive analysis whether to respond with a stiff arm, an olive branch or to prevent it from happening." NEILL MAY GOODMANS LLP

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