AngloGold extends bid to sway more shareholders

Unwilling to concede defeat, AngloGold (AU-N) is extending the expiry date of its takeover offer for Normandy Mining (NDY-T) as U.S. and Australian regulators give the go-ahead to rival suitor Newmont Mining (NEM-N).

By Jan. 11, when the offer period was supposed to end, AngloGold had nabbed 6.5% of Normandy. Most of that was acquired on the final day of the period, prompting the South African to extend the closing date to Jan. 18.

Since setting its sights on Normandy in early September, AngloGold has extended the offer period four times while raising its bid twice to counter Newmont’s. The company needs to acquire at least 10.1% of Normandy to prevent Newmont from evoking Australia’s compulsory acquisition rules should it acquire the rest; otherwise, court approval is required.

AngloGold is offering A30 and 0.0215 of an AngloGold share per Normandy share, whereas Newmont’s bid stands at A50 and 0.0385 of a Newmont share. One Normandy American depository share equals 10 common shares.

Newmont now has regulatory approval to extend its offer to Normandy shareholders in the U.S. and Canada, placing it on a level playing field with AngloGold, which obtained permission in early November. Similarly, Australia’s Foreign Investment Review Board will allow either company to proceed so long as the winner adheres to Normandy’s commitment to Australian Magnesium Corp. and maintains a listing plus a corporate headquaters in Australia.

Franco-Nevada Mining (FN-T), which owns 19.8% of Normandy, and Normandy’s board of directors have pledged their shares to Newmont. Franco plans to merge with Newmont at a ratio of 0.8-to-1 if the company acquires 50.1% of Normandy beforehand.

Franco has scheduled Jan. 30 for a shareholder vote on the matter. Newmont shareholders will cast their votes on both takeovers on Feb. 13. The offers close two days later.

Neither company has defeating conditions attached to their Normandy offer, and each says it would tap existing credit facilities to cover the cash component.

The company that wins the battle will become the world’s largest gold producer. AngloGold currently holds that title.

In related news, Franco has sold 5 million shares of Aber Diamond (ABZ-T) to increase its cash account by a cool $105 million. The sale leaves the royalty king with 4.98% of the diamond miner, or 1.72 million shares.

At presstime, AngloGold was trading at R485 and Newmont at US$21.32, narrowing the gap between their offers to just A5. Franco was valued at $26.90, for a 1% premium over Newmont when the merger ratio is considered.