Lihir Gold Ltd. (LGL.AU) Chairman Ross Garnaut said Wednesday that the company got "encouraging results" testing the market for alternative bidders to Newcrest Mining Ltd. (NCM.AU) but a number of analysts say a rival offer isn't likely to emerge.

Lihir yesterday endorsed a sweetened A$9.5 billion takeover offer from Newcrest and reserved the right to continue existing discussions with potential rival bidders until June 8.

"That exercise produced encouraging results and is continuing," Lihir Chairman Ross Garnaut said in prepared speech notes for the group's annual general meeting.

Garnaut said Tuesday that the discussions, with more than one party, are at "various stages".

Both Newcrest and Lihir are considered possible takeover targets as uncertainty in global equities markets enhances the appeal of safe haven assets like gold.

Some potential rival bidders' shares are trading at multiples much lower than Lihir and Newcrest, possibly making an offer harder for them to afford.

"We think the probability (of a rival bid) is low due to relative valuations that could make acquiring Lihir difficult for other gold companies," Morgan Stanley said, echoing comments made Tuesday by Citigroup.

North American gold giants Newmont Mining Corp. (NEM), Barrick Gold Corp. (ABX) and South African gold miner AngloGold Ashanti Ltd. (AU), cited by analysts as possible suitors for Lihir, declined to comment on whether they are interested in the company.

Deutsche Bank said: "Given the strategic and logistical logic being the proposed Newcrest, Lihir deal we see it being implemented as the most likely outcome."

Macquarie analysts noted that Garnaut made mention Tuesday of the "highly complementary nature of Newcrest and Lihir".

A combination of the two groups will create a A$25 billion company by market value with mines spread across Australia, Papua New Guinea, Ivory Coast, Indonesia and Fiji.

Garnaut noted Wednesday that Newcrest already holds significant assets in Papua New Guinea, and in Queensland, that "sit well" with Lihir's operations in those countries.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com
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