Newmont Raises Normandy Offer, Topping AngloGold Bid (Update4)
By Dudley White
Adelaide, Australia, Dec. 10 (Bloomberg) -- Newmont Mining Corp. raised its bid for Normandy Mining Ltd., Australia's biggest gold miner, to A$5.42 billion ($2.8 billion) in shares, cash and debt, topping by 15 percent an offer by AngloGold Ltd.
Denver-based Newmont added 40 Australian cents to its bid of 0.0385 of a Newmont share for each Normandy share, it said in a news release. AngloGold's bid is worth A$1.67 a share. Normandy recommended the new A$1.90 a share Newmont bid.
Newmont also has agreed to buy Franco-Nevada Mining Corp. Normandy's biggest shareholder, to vault ahead of AngloGold as the largest gold miner. Five of the six biggest gold companies are making acquisitions to boost output and cut costs after gold prices fell by more than a quarter during the past five years.
``This is the knockout blow,'' said Dennis Tighe, who helps manage A$150 million at Dresdner RCM Global Investors in Sydney. He doesn't own Normandy stock, though does own rival Delta Gold Ltd. ``If you were a consolidating company in this industry, Normandy is probably the one you go for, simply because it's so big.''
Normandy shares jumped as much as 11 cents, or 6.5 percent, to A$1.80. The stock recently traded at A$1.76.
The Newmont bid compares with a valuation of between A$1.48 and A$1.88 a share by Grant Samuel & Associates, independent valuers hired by Normandy. Normandy said directors will recommend the new Newmont offer ``subject to their fiduciary duties.''
`We Are Pleased'
``We are pleased that Newmont has increased its offer for Normandy,'' Chairman and Chief Executive Robert Champion de Crespigny said in a statement distributed by the Australian Stock Exchange. ``Newmont's revised offer better recognizes the intrinsic and strategic value inherent within the company.''
AngloGold on Nov. 29 added 20 Australian cents to its bid of 2.15 AngloGold shares for every 100 Normandy shares. Normandy had A$1.18 billion of long-term debt at Sept. 30.
Andrea Maxey, an AngloGold spokeswoman in Perth, declined to comment on the higher Newmont bid
The Johannesburg-based company wants Normandy to reduce its dependence on South Africa, where the depth of deposits makes mining costs the highest in the world. Spot gold recently traded at $274.20 an ounce.
Barrick Gold Corp. may also bid for Normandy, analysts and investors said. The Toronto-based company last week said it's focusing on the scheduled closing on Dec. 14 of its $2.4 billion purchase of Homestake Mining Co., though wouldn't rule out making an offer for Normandy.
Over the Top
``There is talk of them (Barrick) coming over the top,'' said Paul Carter, associate director of Paterson Ord Minnett in Perth. Still, ``they'd have to pay well over'' and may decide that Normandy is too expensive after Newmont bid higher than the independent valuer's range, he said.
As well as Barrick buying Homestake, Australia's Delta Gold Ltd. has agreed to merge with Goldfields Ltd., while Newmont last year bought Battle Mountain Gold Co. Harmony Gold Mining Co. may bid for Australia's Hill 50 Gold NL, the Australian Financial Review reported today, without citing sources.
Normandy shareholders will receive the 40-cent cash portion of Newmont's bid if 90 percent of the miner's shareholders accept the Newmont bid. AngloGold's bid is unconditional.
``Ours is a better bid, a more secure and liquid security, a stronger vision and a better company,'' Newmont Chief Executive Wayne Murdy said in a statement.
Bidding for Normandy began on Sept. 5 when AngloGold offered A$1.42 a share in stock. Toronto-based Franco-Nevada earlier this acquired 19.9 percent of Normandy in exchange for $48 million of cash and mines in Australia and the U.S.
Newmont was advised by J.P. Morgan Securities Inc. and Goldman Sachs Group Inc. Normandy is being advised by Macquarie Bank Ltd. Deutsche Bank AG and UBS Warburg are advising AngloGold.
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