Newmont Corporation’s $24.5 billion bid for Newcrest Mining has sparked another mini battle - the battle for supremacy among local hedge fund trading desks.
Only 2 per cent of Newcrest shares changed hands on Monday, despite hedge funds sales desks trying to rev up clients.“NCM has been a takeover target for decades and we finally have an indicative proposal,” Credit Suisse’s Sujit Dey, the best known hedge funds sales trader in the country, told clients.
UBS’ desk said Barrick was best placed to unlock value from Newcrest’s much talked about PNG assets, which account for about 20 per cent of its valuation. It said the big Canadian had a history of working with governments from Africa to Pakistan, and would be keen on Newcrest’s copper angle. Goldman Sachs’ desk said it was hard to see Newmont lifting its bid by more than another 5 per cent, given it had already increased its scrip ratio from 0.363 to 0.38.
If the battle was getting clients to trade, then JPMorgan was the clear winner on day one. [It was joint winner on the investment banking side,JPMorgan handled 25 per cent of Newcrest shares traded on Monday according to Bloomberg data, putting it ahead of UBS , Credit Suisse and Morgan Stanley .It looks to Street Talk like hedge funds really were waiting to see how Newmont traded on Monday night, before getting involved. Only 19.
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