Newmont $29b takeover to spur massive liquidity event (that few are watching)

afr.com:

Newmont’s proposed acquisition of ASX-listed gold miner Newcrest is widely expected to sail past the shareholder takeover vote in two weeks. But what hasn’t been widely discussed is whether the takeover will be the biggest liquidity event on the ASX sinceSquare’s $39 billion Afterpay deal.

In a nutshell, Newmont’s ASX-listed Chess Depository Interest is on track to hit the bourse next month, forming a local listing for the $US32.4 billion ($50.4 billion) New York-listed gold mining giant.

And that’s going to mean investors will scramble over coming weeks to form a view of the newly merged group and decide whether they’ll need to rebalance their exposure after the takeover.

Newmont chief executive Tom Palmer at the World Mining Congress in Brisbane in June. Jamila Toderas

Under the proposal, Newcrest shareholders will be issued 0.4 Newmont shares for each share they hold, plus a franked special pre-completion dividend of up to $US1.10 per share.

Newcrest shareholders can elect whether to own the merged company directly through NYSE-listed Newmont or via CDI. The outcome of this election will form the basis of the Newmont CDI market capitalisation, which will either hover around Newcrest’s current market cap of $24 billion, less the special dividend, or fall.

The big question is: will Newcrest investors take up the CDI, ensuring the merged company has ongoing liquidity and a strong presence on the local exchange? And if large-cap funds rebalance their portfolios, which other gold miners stand to benefit?

Sources who spoke to Street Talk pointed to instances where split-listings have been successful like Champion Iron and Patriot Battery Metals, noting these were more likely to work in the mining industry where Australia