Newmont adds a dime, Anglo holds fire

South Africa’s AngloGold (AU-N) plans to stick with its original offer despite Newmont Mining (NEM-N) boosting its bid for Australia’s Normandy Mining (NDY-T) by A10 per share on Thursday.

Anglo’s CEO Bobby Godsell said, “Anglo’s offer is full and fair and the company has no basis upon which it could justify an increase in its offer.”

Anglo’s bid stands at A30 per share plus 2.15 AngloGold shares for every 100 Normandy shares. It is scheduled to close on Friday, Jan. 11, 2002.

With Newmont’s latest cash bonus, Normandy shareholders are offered A50 cash plus 0.0385 Newmont common shares for each of their shares. The offering amounts to A$1.93 per Normandy share, based on Newmont’s closing price on the New York Stock Exchange on Jan. 2, 2002. The bid tops an independent expert’s report, which values the company at A$1.48-1.88 per share.

Normandy’s board of directors has recommended the revised bid. Normandy’s CEO Robert Champion de Crespigny said, “Considering the values of the two bids, as well as other factors such as trading liquidity and the long-term potential and value creation associated with Newmont and AngloGold implementing their plans after completion of the transactions including, in Newmont’s case, the acquisition of Franco-Nevada, the revised Newmont bid continues to be superior to the offer by AngloGold and has the full support of Normandy’s board. Moreover the Newmont bid provides a significantly larger cash component.”

Newmont recently received the thumbs up from the U.S. Federal Trade Commission for the Normandy takeover and subsequent merger with Franco-Nevada Mining (FN-T), Newmont expects to wrap up the transactions by mid-February. However, the deals remain conditional on several factors, including a minimum 50.1% acceptance level by Normandy shareholders.

Newmont’s CEO Wayne Murdy said in a prepared statement, “Our bid is clearly superior to AngloGold’s and provides Normandy shareholders significantly higher overall value, approximately 67 percent more cash up front and the ability to participate in the world’s premier gold company.”

Newmont’s latest bid comes on the heels of Anglo’s own dime increase late last week. That boosted-bid included a proposed alliance with Barrick Gold (ABX-T), which would be handed sole operational control over the Kalgoorlie Super Pit in Western Australia — the country’s single-largest gold producer. Barrick (via its recent merger with Homestake Mining) and Normandy equally share the mine and its managerial responsibilities. In return, Barrick would provide an appropriate level of compensation.

AngloGold says its alliance with Barrick would generate synergies of about A$220 million in the medium term, enough to compensate for its higher offer.

Using each stock’s closing prices on the New York Stock Exchange on Jan. 2, 2002, Newmont’s revised bid has a value of A$1.93 per Normandy share (valuing Normandy at A$4.3 billion), while AngloGold’s offer rings in at A$1.81 (or A$4.04 billion).

By mid-afternoon on Jan. 3, Newmont shares were off US13 to $18.96 while AngloGold’s stock was US62 higher at $18.65 on the New York Stock Exchange. Normandy shares were up 20 to $15.20 on the Toronto Stock Exchange.