Lexpert Magazine

LEXPERT MAGAZINE | JULY 2019 15 On Monday, March 4 — a week aer Barrick surfaced — Newmont answered, formally rejecting the hostile bid. at's when things went from interesting to really interesting. In rejecting the offer, Newmont pub- lished a term sheet for combining assets in Nevada — which Barrick had long wanted. May says Newmont's analysis concluded that the significant benefits of a Barrick- Newmont combination being touted in the market "focused on a joint venture in Ne- vada, not a combination of the two com- panies. Once that initiative was presented to Barrick, from my perspective, there was incredible speed in moving ahead." It was a crazy week, says Shishler, Barrick's lead Canadian counsel. e term sheet was analysed. What would a joint venture look like? Was what Newmont proposed fair and feasible? By ursday, the two companies agreed it was feasible. e question was could they agree on terms, get the legal work done and documents out to shareholders ahead of Newmont and Goldcorp's shareholder votes, scheduled four weeks later. Barrick kept a gun to Newmont's head. It said if a joint venture wasn't in place by Monday, March 11 — giving the legal teams just three days — it would proceed with its hostile bid. May says there was very little sleep for anyone in that key 72-hour period. "People would go home to shower and come back. At Goodmans we have a floor of board- rooms, we went from one to another laying waste to one at a time. One was full of pizza boxes, the next Chinese food containers. We made our way around the floor — that would be the best evidence of how much time we spent there." It was much the same at Davies, with some of the Barrick people and Cravath team on site. "What happened in that 72 hours was crazy," says Shishler. "We nego- tiated an implementation agreement, the architecture for the joint venture. Just to give you some idea there were 22 or 23 dif- ferent assets we had to get into a new entity. It would be hard to transfer just one mine in that time frame, much less complete what amounted to 22 or 23 different asset sales. e stakes were enormous, and the amount of work was enormous." But Barrick and Newmont also needed a separate agreement on governance struc- ture setting out things like board and ad- visory committee composition, how fund- ing works, how dilution would work, how people take profits out of the joint venture, and what happens to the joint venture out- put. Shishler says it was apparent there just wasn't going to be enough time to prepare that by Monday morning. "As you can imagine, people weren't comfortable signing and giving up the [hostile] bid without an agreed governance structure. So we had a wholly baked form of agreement attached to the implementation agreement that would govern the joint-ven- ture going forward. "I've done a lot of joint venture agree- ments over my career. ey generally take months, not weeks. And certainly not days." Yet on Monday, March 11, Barrick pulled its hostile bid off the table in favour of a deal that would see the two companies combine assets in Nevada, with Barrick controlling 61.5% of the venture. April 18, Newmont's acquisition of Goldcorp closed. Four days later, Newmont and Barrick announced they had cleared all the regu- latory hurdles and Newmont Goldcorp Corp. was born, instantly becoming the world's largest gold producer by assets. At least until the next move. Aer all, it's still a jungle out there. ART OF THE DEAL FEATURES "With a high likelihood of an interloper such as Barrick emerging we knew the deal protections had to be right. They had to be perfect." ALEX GORKA OSLER, HOSKIN & HARCOURT LLP Sandy Rubin is a legal affairs writer and consultant based in Toronto.

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