Newmont Mining Ups Bid for Australia's Normandy Mining Ltd. to $2.2 Billion
By JENNIFER HAMILTON
Associated Press Writer
DENVER (AP) -- Newmont Mining Corp. raised its bid Sunday for Australia's Normandy Mining Ltd. by 15 percent to $2.2 billion in
a deal that could create one of the world's biggest gold producers.
Newmont's offer now values Normandy shares at 98 cents (1.90 Australian dollars), and the company at $2.2 billion (4.3 billion
Australian dollars).
The deal trumped a rival offer made last week by South Africa's AngloGold Ltd., which valued Normandy at 84 cents (1.64
Australian dollars).
In a statement released Monday, the Normandy Board of Directors endorsed Newmont's offer.
Under the deal, Newmont also would acquire Canada's Franco-Nevada Mining Corp. to create the world's largest gold producer.
Headquartered in Denver, the combined company would produce 8 million ounces of gold a year and have 97 million ounces of gold
in reserves.
Newmont spokesman Doug Hock said Sunday the deal could be completed by February.
He said the three-way deal combines Normandy's development and low-cost mining productions with Newmont's mining operations
and Franco-Nevada's royalty revenue stream.
The combined company, which would surpass AngloGold for the top spot, would have 22 mines on five continents, interests in eight
other gold operations and 12,500 employees.
``The combined company will benefit from a strong balance sheet, providing the financial flexibility to capitalize on an outstanding
pipeline of growth prospects,'' Newmont president and chief executive Wayne Murdy said in a written release.
Under the Newmont offer, shareholders of Normandy would receive .0385 shares of Newmont common stock for each Normandy
common share, plus 21 cents (40 Australian cents) per share in cash.
Newmont, currently North America's largest gold producer, would acquire the Toronto-based Franco-Nevada for 0.8 of Newmont
common stock for each share of Franco-Nevada common stock, valuing it at about $17.72 (28.36 Canadian dollars) per share, or $2.8
billion.
Franco-Nevada holds a 20 percent interest in Normandy, Australia's largest gold producer, thus reducing the combined value of the
deal to $4.4 billion. |
