AU returning fire:
AngloGold Comments On Newmont’s Revised Offer
Date: Monday, December 10, 2001
Newmont Mining Corporation today announced a revised takeover offer for Normandy Mining. AngloGold continues to believe that the revised Newmont proposal is complex, highly conditional and a high-risk proposition for Normandy shareholders.
AngloGold considers that it is not meaningful at this stage to compare the relative values of the AngloGold and Newmont offers. The relative values can only be properly assessed once the Newmont share price has responded to the revised offer.
AngloGold notes that since the announcement of Newmont’s dual takeover offers for Franco Nevada and Normandy on 14 November Newmont’s share price has fallen by more than 10%. It is probable that the Newmont share price will again fall in response to the revised offer for Normandy. In contrast, AngloGold’s share price has risen since the announcement of its offer on 4 September 2001.
AngloGold notes the following:
1. Dangerous level of financial leverage
It is important for Normandy shareholders to appreciate that under Newmont’s proposal there is no guarantee that the acquisition of Franco Nevada will be completed. In the absence of completion of the acquisition of Franco Nevada, Newmont will have a dangerous level of financial leverage particularly in the event of a fall in the gold price. Newmont is particularly exposed to a fall in the gold price given its stance on gold hedging.
2. Newmont’s proposal remains highly conditional
Newmont’s offer remains subject to a large number of conditions including: a 50.1% minimum acceptance condition; Foreign Investment Review Board approval; the approval of Newmont shareholders; no material adverse change of Normandy; various governmental and regulatory approvals; and various modifications from the Australian Securities and Investments Commission. This compares with AngloGold’s offer, which is now free from defeating conditions.
3. Timing for payment
AngloGold also notes that Normandy shareholders will not be able to receive their consideration from Newmont until mid-February at the earliest, whereas AngloGold’s offer is open and capable of immediate acceptance. Therefore, Normandy shareholders will remain exposed to further downward movements in the Newmont share price for at least the next two months. In contrast, payments under the AngloGold offer will be made from 20 December.
4. Australian Takeovers Panel Challenge
Normandy shareholders should also be aware that the Australian Takeovers Panel is seeking further advice in relation to AngloGold’s application regarding the special benefits that are to be given to Franco Nevada, its associates and shareholders that are not being offered to Normandy shareholders. The outcome of this application could have a material bearing on Newmont’s offer for Normandy.
AngloGold is also reviewing the legality of these arrangements in other jurisdictions, including Canada, and whether it will also commence legal proceedings in those jurisdictions.
AngloGold remains of the view that the combination of AngloGold and Normandy offers a compelling strategic fit of assets, a sustainable high dividend and the real possibility of significant share price growth.
Disclaimer
Except for the historical information which may be contained herein, there maybe matters discussed in this news release that are forward-looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors including, but not limited to, development of the Company's business, the economic outlook in the gold mining industry, expectations regarding gold prices and production, and other factors, which could cause actual results to differ materially from such forward-looking statements, refer to the Company's annual report on the Form 20-F for the year ended December 31, 2000 which was filed with the Securities and Exchange Commission on April 23, 2001.
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