Its share price has fallen like a rock. $35.95 when they got Lihir, then up over $40 by the end of that year. Here's a report of the happy takeover at the time: Lihir shareholders got 1 newcrest share for every 8.5 they held at that time. Now it has a virtual value of only 2.1 Lihir shares. Pretty piss poor effort over less than 3 years. Note in the article that the stronger AUD was helping Newcrest win the bidding at the time. Weaker AUD may now make it ripe for takeover I reckon. Group buy? disclaimer: I don't own any Newcrest shares and feel sorry for any poor bastard that does.
The thing to remember is that Newcrest bought Lihir mainly with shares. So I think the monetary value of the takeover (and the subsequent write downs) is less than the nominal amount. This assumes that Newcrest shares were overvalued at $35. Also Lihir's share price if it had remained stand alone would have been hammered, so the comparison of the prices then and now is a bit deceiving. I still think it was a bad takeover - but I don't think it was quite as horrible as is being made out. It has turned out with hindsight to be a terrible decision, but given the information available at the time I think they slightly overpaid - not 4x overpaid as might be implied from above. Just my 2c.
