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A truck waits for ore at Newmont Mining Corp's copper and gold mine on Indonesia's Sumbawa island, in this file picture taken September 21, 2012.Reuters

Barrick Gold Corp. launched a hostile US$17.8-billion takeover bid for Newmont Mining Corp., sparking a war of words between the world’s two biggest gold miners.

Toronto-based Barrick said its all-share, no-premium transaction announced on Monday is a “once in a lifetime” opportunity to create a leader in the gold industry. The company said that in the first five years after a merger, it expects to find more than US$750-million in annual cost savings, mostly in the Nevada gold operations the companies have. The present value of all future cost savings from the deal is about US$7-billion, Barrick said.

If the transaction succeeds, it would create by far the biggest player in the gold industry. However, Monday’s trading indicates that many investors don’t expect Barrick’s current offer to win the day. Barrick is offering 2.5694 shares for each Newmont share, which, after a decline in Barrick’s stock, works out to US$32.40 for each Newmont share. The U.S. miner’s shares closed at US$36.10 in New York.

“It’s hard to support a deal where you would essentially tender your shares and have them be worth less than where they are trading today. That is just a hard thing to do,” said Chris Mancini, a precious metals analyst with Gabelli Funds.

Barrick’s bid for Newmont comes about five weeks after the Colorado-based miner announced its own friendly transaction to buy Vancouver-based Goldcorp Inc. for US$10-billion. On Monday, Barrick made it clear it has no interest in acquiring Goldcorp’s assets and it is asking Newmont to drop that bid.

In a conference call with analysts, Barrick’s chief executive Mr. Bristow extolled the virtues of a Barrick/Newmont tie-up, and criticized the Newmont/Goldcorp deal as “ill advised,” “desperate and bizarre,” and lacking substantial business synergies.

Newmont shot back shortly after, defending its efforts to buy Goldcorp and warning shareholders of the dangers of being acquired by Barrick. In a release, Newmont slammed Barrick’s “poor track record on delivering shareholder returns and unfavourable jurisdictional risk.”

“We have delivered. They simply have not,” said Newmont CEO Gary Goldberg at the BMO Metals and Mining conference in Hollywood, Fla., on Monday. “We have the global mining and management experience. They simply do not.”

During the presentation, Mr. Goldberg compared the stock performance of Barrick and Newmont since 2014, the last time merger talks with the two senior miners broke down. Over that period, Newmont’s stock has risen sharply, while Barrick’s has fallen.

“The current Barrick management team has only been together for eight weeks and has never collectively managed a global portfolio of our scale, complexity or quality,” Mr. Goldberg also told the conference.

Mr. Bristow is “very busy jetting around dealing with the issues and [putting out] fires around his empire and I don’t know how he could take anything like this on,” Mr. Goldberg added during a phone interview with The Globe and Mail.

In a separate interview, Mr. Bristow shrugged off Mr. Goldberg’s criticisms as “schoolboy playground indignation.”

News of a possible deal between Newmont and Barrick surfaced late Thursday when The Globe and Bloomberg reported that Barrick was weighing a bid for its biggest rival. On Friday, Barrick confirmed it was indeed interested in buying Newmont.

Keith Trauner, managing partner with GoodHaven Capital Management, which owns shares in Barrick, said a Barrick-Newmont combination would be very powerful given Mr. Bristow’s record with Randgold and Mr. Thornton’s access to finance and his well-established relations with China. But Mr. Trauner said the challenge will be giving Newmont shareholders a solid financial reason to support the deal instead of the Goldcorp proposal. Mr. Trauner’s firm owns 1.5 million Barrick shares.

Seymour Schulich, a long-time supporter of Mr. Thornton and one of Barrick’s biggest individual shareholders, also praised the miner’s salvo and said the cost savings would be significant.

Barrick says the bulk of cost saving from the acquisition would come through the combining of the two companies’ operations in Nevada. Both miners have operated in the state side-by-side for decades, with their mining trucks “criss-crossing” each other all day long, according to Mr. Bristow. He says billions can be saved by integrating their supply chains, sharing common processing facilities and teaming up on procurement. Mr. Bristow also said that Newmont would benefit from his expertise in underground mining and that would pave the way for better mine plans and more profitable mining.

Both Barrick and Newmont confirmed on Monday that the two mining companies recently talked about teaming up in a joint venture in Nevada, as opposed to an outright takeover by Barrick. But in the conference call, Mr. Bristow said he believed a takeover was preferable because the assets could be more efficiently managed under Barrick’s management team only. He also said that Newmont’s request to be the operator of the Nevada assets and gain a 50-per-cent share was a non-starter.

Mr. Goldberg said that despite the hostility between the two companies, he’s still willing to explore the possibility of doing a joint venture with Barrick in Nevada.

Some analysts, too, believe that such an arrangement makes more sense.

“Over 70 per cent of the stated synergies are in Nevada,” said Kerry Smith, analyst with Haywood Securities Inc. in a note to clients on Monday. “We would rather see a [joint venture] rather than a complete merger as the combined company would be a monster to manage.”

The combined market capitalization of Barrick after an acquisition of Newmont would jump to about US$42-billion from US$22.8-billion, which would make it three times bigger than its next closest competitor, Australia’s Newcrest Mining Ltd.

On April 4, Newmont’s shareholders will vote on whether the company should proceed with its acquisition of Goldcorp.

Vanguard Group Inc., BlackRock Inc., Van Eck Associates and State Street Global Advisors are the top holders of Newmont’s stock with a collective stake of around 30 per cent, according to Refinitiv data.

Of potentially great importance will be the opinions of proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis & Co., which will offer opinions to institutional shareholders on which deal they should gravitate toward.

On Monday, shares in Barrick fell by 3 per cent on the Toronto Stock Exchange, while Newmont shares fell by 1 per cent in New York.