UPDATE 2-Newmont<NEM.N> wins Normandy as Anglo bows out
(Recasts with AngloGold acceptances, analysts, updates share)
By Allan Seccombe and James Regan
JOHANNESBURG/SYDNEY, Jan 18 (Reuters) - Newmont Mining Corp
<NEM.N> won the fight for Normandy Mining Ltd <NDY.AX> on Friday as AngloGold Ltd <ANGJ.J> bowed out, clearing the way for the U.S. company to assemble the world's largest gold mining house.
South Africa's AngloGold scraped together acceptances
representing just 7.1 percent of Australian miner Normandy for its cash and scrip offer which expired at 0800 GMT on Friday.
"The company believes that it is not possible for AngloGold to obtain majority control of Normandy and has therefore closed its offer," the world's former number-one gold producer said.
With AngloGold throwing in the towel, Newmont leapfrogs the South African group into the top spot. The world bullion
industry has seen a wave of consolidation as producers strive for economies of scale amid dull gold prices.
AngloGold Chairman and CEO Bobby Godsell said the group was disappointed, but it would not overpay. "We gave the bid our very best effort. The competing bidder has seen more value in the Normandy assets than we were able to identify reliably and therefore made a higher offer."
One analyst said: "It is a pity that AngloGold couldn't get 10 percent of Normandy. That would have prevented the compulsory acquisition of Normandy's shares by Newmont. Now they don't really have any leverage in dealing with Newmont."
MESSY END
The four-month battle with U.S.-based Newmont ended messily as the market was initially told the Anglogold offer was extended.
AngloGold legal advisers, Freehills, mistakenly notified the Australian Stock Exchange that AngloGold had extended its offer, causing some confusion in trading of AngloGold shares, an AngloGold spokeswoman said.
The ASX broadcast the news of an extension over its public
address system.
Newmont has had the blessing of Normandy's board and
Franco-Nevada Mining Corp <FN.TO>, the Australian firm's largest
shareholder with a 20 percent stake, from the outset.
Newmont is also offering US$2.58 billion in shares to buy
Franco-Nevada, which derives most of its income from gold
royalty payments.
AngloGold's final bid valued Normandy at A$1.99 a share, or
A$4.44 billion (US$2.26 billion), versus Newmont's A$2.04, or
A$4.56 billion. Newmont's offer closes on February 15.
Newmont increased the cash part of its offer on January 3 to
A$0.50 and 0.0385 Newmont shares for each Normandy share.
The bids catapulted Normandy shares above A$2 each -- nearly
double the price when AngloGold launched its bid on September 5.
Normandy finished four cents lower at A$2.01 on Friday, with
AngloGold saying it quit coming after the close of trade.
WHERE TO FOR ANGLOGOLD?
"The big question now is what is AngloGold's plan B. There
are a lot of rumours of a number of small acquisitions in Africa
and Australia," said gold analyst Alan Cooke at Johannesburg
brokerage Rice Rinaldi.
Possible takeover targets include South Africa's number two
gold miner Gold Fields <GFIJ.J>, Ashanti Goldfields <AGC.GH> in
Ghana and Australia's Aurion Gold <GLD.AX>, he said. "There is
lots left for consolidation, but the North Americans are
obviously winning the day in the consolidation game."
Godsell said AngloGold had five major capital projects that
would come into production in the next three years, with an
output of 20 million ounces of gold over the life of the
projects at an average cash cost of around $147 an ounce.
"AngloGold will also seek value growth through its
substantial and focused exploration programme," he said. He did
not specify the projects and AngloGold officials declined
requests for interviews.
The market was also pondering the future of AngloGold's
relationship with Canada's Barrick Gold <ABX.TO>, with which it
had planned synergies dependent on winning the Normandy bid.
At 1200 GMT AngloGold was 3.4 percent lower at 460 rand,
underperforming the stock exchange gold index <.JGOL>, which was
down 2.5 percent. AngloGold earlier touched a session low of 456
rand.
"I think people who were positioned for the deal to go ahead
are happy to get out of the stock now. They also are considering
that AngloGold sold its Free State assets for 2.2 billion rand,
and they are now worth more than three," said an analyst.
AngloGold wanted Normandy to accelerate a push to hold more
mining assets outside Africa, but was outbid by Newmont despite
sweetening its original scrip offer twice with cash.
((Allan Seccombe, Johannesburg newsroom, +27-11 775-3155, fax:
+27-11 775-3132, e-mail: newsroom@reuters.co.za))
(A$1 = US$0.51)
REUTERS
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