KT, this was in today's National Post (Canada). They too mention your rumour but most of the story concerns Newmont's bid for Franco Nevada and Normandy.
nationalpost.com
November 17, 2001
Market waits for new Anglo bid on Normandy
Traders bet Barrick wants stake in South African miner
Drew Hasselback
Financial Post, with files from news services
AngloGold Ltd. has not ruled out launching a counterbid for Australia's Normandy Mining Ltd., a move that would throw a wrench in Newmont Mining Corp.'s multi-billion plan to create the world's largest gold producer.
Meanwhile, Barrick Gold Corp. yesterday refused to comment on rumours it would bid for a major stake in AngloGold, as the global gold sector continued to be rocked by seismic changes.
The big shake-up took place on Thursday, when Denver-based Newmont unveiled a $9-billion plan to acquire both Normandy and Toronto-based Franco-Nevada Mining Corp.
Remarks by Bobby Godsell, chief executive of AngloGold, suggest his company may not let Newmont pick up Normandy without a fight. Expect AngloGold to respond to Newmont's bid before Nov. 26, he said. "We will offer a considered response," Mr. Godsell said. "A week to 10 days, that's the timetable."
Newmont's plan includes a $3-billion offer for control of Franco-Nevada, a Toronto-based royalty firm that has built up an impressive portfolio of gold properties. Franco-Nevada's holdings include a ready made war chest of $1-billion in liquid investments.
Newmont is also offering A$3.8-billion to take control of Normandy, trumping the A$3.2-billion bid AngloGold announced for the Australian gold producer in September.
Mr. Godsell said AngloGold would have to find new value if it was to top Newmont's bid. "We won't overpay."
Franco-Nevada owns just under 19.9% of Normandy and was largely responsible for securing the sweetened bid.
The Newmont proposal has the support of all three boards. The combined companies would have annual production capacity of eight million ounces and a market capitalization of about $14-billion.
Research Capital has published a comment that points out the Newmont bid would be hard to beat. The Normandy deal requires the approval of at least 50% of shareholders and Franco-Nevada is voting its 20% in favour of the deal. Also, Newmont must pay Franco-Nevada a US$100-million break fee if the deal dies.
But Research Capital also said Newmont's bid is weak because it is almost all stock. Barrick or Anglo would be in the best position to put up a counter bid that offers more cash.
"A cash component in a bid by a joint offer for Normandy and Franco-Nevada would have the best probability of success, but it may be cumbersome to execute," the report concludes.
AngloGold's future was very much in question as traders gambled Barrick will make a move on the South African firm. Its shares closed 3% higher on the Johannesburg Stock Exchange yesterday.
Barrick "might be looking to make an offer to AngloGold shareholders," said Michele Blaauw, a trader with Barnard Jacobs Mellet Holdings in Johannesburg.
Vincent Borg, Barrick spokesman, said the company would not comment on the rumours.
Broker speculation is the natural result of the hype flowing from the Newmont deal announced on Thursday, he added.
"It's a natural knee-jerk reaction for a lot of traders to start a rumour and see it bounce around the world," Mr. Borg said.
Barrick is a full participant in the current round of gold industry consolidation. The Toronto-based company is putting the finishing touches on its US$2.2-billion friendly deal to scoop up Homestake Mining Co. of San Francisco. The deal is expected to close Dec. 14.
AngloGold is 53% owned by Anglo American PLC of Great Britain. At yesterday's closing price, it would cost US$1.82-billion to buy the remaining 47%, not including any premium.
Philip Buys, a gold analyst with De Witt Morgan and Co. in Johannesburg, said AngloGold will file a counter-bid because it can afford it and because it wants to reduce its exposure to Africa, home to most of its production.
"I think AngloGold will definitely up its bid, purely out of pride," Mr. Buys said.
One South African analyst, who asked not to be named, said Anglo would have planned for a counter-bid.
"This is quite important to them. They aren't down and out; they haven't lost the deal yet," he said.
dhasselback@nationalpost.com |
