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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Frank Pembleton who wrote (4665)	11/30/2001 7:37:23 AM
From: Frank Pembleton	Read Replies (1) \| Respond to of 36161

AngloGold boosts offer for Normandy Franco-Nevada committed to Newmont bid Paul Vieira and Drew Hasselback Financial Post, with files from news services AngloGold Ltd. has increased its offer for Normandy Mining Ltd., Australia's largest gold miner, by 16% -- adding cash to its latest bid. The South African mining giant said late yesterday it will add a cash payment of A20¢ per Normandy share to its original offer. The offer has trumped a deal by Newmont Mining Ltd. of Denver. That deal, announced Nov. 14, involved a share swap and a cash component of A5¢ a share. AngloGold's new bid is valued at A$1.65, compared to Newmont's A$1.51 at yesterday's closing price. The battle has massive implications for Canada. Normandy is 19.9% owned by Toronto-based Franco-Nevada Mining Corp. Newmont, under its original deal, was hoping to buy Franco-Nevada and Normandy through friendly takeovers, then fold them into what would become the world's largest gold producer. David Harquail, senior vice-president at Franco-Nevada, said last night that his company remains "committed to the Newmont bid," adding that the three-way deal offers a "better, unhedged gold company and a better vision," compared to the AngloGold offer. The boards of Newmont, Normandy and Franco-Nevada have all supported the three-way deal. Normandy sources say they had expected AngloGold to file a sweetened bid. A source familiar with the takeover battle said the company will expect Newmont to respond as well. An independent valuation commissioned by Normandy has put the target company's value in a range of A$1.48 to A$1.88 a share. AngloGold said it has declared its takeover bid free of all conditions, including the minimum acceptance condition. Its bid is now subject to approval by AngloGold shareholders, which is expected to be received at a meeting on Dec. 19. In addition, AngloGold said it will accelerate payment to Normandy shareholders who accept its revised bid. Payment will be provided within five business days of acceptance, with first payments beginning Dec. 20. The fight for Normandy started on Sept. 5 when AngloGold launched a hostile takeover bid for Normandy, valued at A$3.2-billion all-stock bid. A bidding war was expected when Franco-Nevada executives complained in October that AngloGold's bid undervalued Normandy. Newmont responded with a sweeter offer on Nov. 14. When the Denver miner announced its bid, the entire value of the deal was worth A$3.8-billion, or a A$1.70 a share. The value of Newmont's bid has fallen as its shares have dropped. nationalpost.com

To: Frank Pembleton who wrote (4665)	11/30/2001 8:37:09 AM
From: russwinter	Read Replies (3) \| Respond to of 36161

I would think that the standard position producers have with Enron are OTC vanilla forward sales or hedges? And no doubt most of these sales were established at higher prices. If Enron can't fulfill those contracts (counterparty failure), then those favorable prices are lost, and the hedgers can just get in line with everybody else. The 64K question: what does this do to NG and oil production (new drilling is a given now) going forward? If you are the CEO of a natural gas producer, and you now realize that those $4.00 contracts with Enron for next summer's delivery, aren't worth the paper they were written on, and you now face $2.50 or worse (below the cost of replacement in most cases), what would you do? If it were me, I'd turn most (leave enough to cover skeleton expenses) of it off, and wait for a better day.