AngloGold lifts bid for Normandy by 16%


Normandy chief Robert de Crespigny said on November 15 he and other board members planned to accept Newmont's offer, rather than the AngloGold bid

By CNN's Geoff Hiscock
Asia business editor

SYDNEY, Australia (CNN) -- The takeover battle for Australian gold producer Normandy Mining intensified Thursday as South Africa's AngloGold lifted its offer by 16 percent.

Its revised offer of almost $2 billion puts it ahead of a competing bid from U.S.-based Newmont Mining Corp.

AngloGold said it was adding a cash payment of Aust. 20 cents per Normandy share to its original offer.

It said the new offer valued Normandy at A$1.65 a share, based on AngloGold's closing price on the New York Stock Exchange Wednesday.

Its original all-stock offer on September 5 was worth about $1.7 billion (A$3.2 billion) and valued Normandy at A$1.42 a share.

On the ASX, Normandy stock jumped on news of the higher bid, gaining 9 cents or more than 5 percent in Thursday morning's session to reach A$1.61, before closing for the day at A$1.58, up 6 cents or 3.95 percent.

Pressure on Normandy board

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AngloGold's move will put pressure on Normandy's board, which rejected AngloGold's original offer and recommended instead that shareholders accept Newmont's November 14 bid of about $1.98 billion.

That bid was part of a package in which Newmont said it would buy Normandy and Toronto-based Franco Nevada Mining Corp for a total of $4.41 billion in stock and cash.

Franco Nevada is the largest shareholder in Normandy, with a 19.9 percent stake.

Since Newmont announced its offer, the price differential has moved in AngloGold's favor.

In a statement to the Australian Stock Exchange Thursday morning to announce its higher offer, AngloGold said Newmont's offer was now worth a maximum of A$1.50 a share (A$1.45 plus an extra 5 cents if acceptances reach 90 percent), based on its Wednesday closing price on the NYSE.

Normandy said later its board would meet as soon as possible to consider its position. It urged shareholders to do nothing. From Denver, Newmont said it would respond "in due course" to AngloGold's revised offer.

Premium attached to Newmont scrip


AngloGold's Bobby Godsell said he was confident Normandy shareholders would find the new offer attractive

Newmont is basing its campaign for Normandy on what it says is the premium that investors attach to its scrip.

But AngloGold now has put a higher offer on the table, plus it has won regulatory approval from Australia's Foreign Investment Review Board.

AngloGold, which is 53.4 percent owned by the giant resources group Anglo American, said it would also accelerate its payment to Normandy shareholders from 30 days to five business days.

Normandy, based in Adelaide, is Australia's biggest gold miner, producing more than 2 million ounces a year.

Newmont is the world's No. 2 producer behind AngloGold, and has extensive operations in the U.S., Canada, Mexico and five other countries.

Normandy executive chairman Robert Champion de Crespigny told shareholders on November 15 that he and the other board members intended to accept the Newmont offer.

But as the value differential changes, one problem for the Normandy board now is that it agreed to a A$38.3 million conditional break fee if the Newmont bid fails.

AngloGold's chairman and CEO, Bobby Godsell, said he was confident Normandy shareholders would find the revised offer "extremely attractive", both in terms of price and certainty.

"I believe that the real value in a transaction of this kind is more likely to be achieved in the longer term than it is to be found in the immediate benefits of any offer," he said.