Newmont opens bidding war for Normandy


AngloGold's chief Bobby Godsell finds himself in a bidding duel with Newmont for Normandy Mining

SYDNEY, Australia (CNN) -- Shares in Australian gold producer Normandy Mining rose almost 7 percent Thursday as a takeover battle emerged between Newmont Mining Corp of the U.S. and South Africa's AngloGold Ltd.

Denver-based Newmont said Wednesday it wanted to buy Normandy and Franco-Nevada Mining Corp. Ltd. for a total of $4.41 billion in stock and cash.

Toronto-based Franco-Nevada is the largest shareholder in Normandy, holding a 19.9 percent stake.

Newmont's offer tops an earlier bid from AngloGold, the world's top gold producer.

Newmont offered 0.8 a share for each Franco-Nevada share, valuing Franco at about $2.83 billion, a spokesman said. Franco-Nevada is a leading precious minerals royalty company.

Extra cash if 90 percent accept offer

Newmont also offered 0.0385 shares for each Normandy share, valuing Normandy at about $1.98 billion. It also will pay Aust. $0.05 in cash for each Normandy share if the offer is accepted by at least 90 percent of Normandy shareholders.

AngloGold said Newmont's bid valued Normandy at A$1.51 a share (plus the possible 5 cent increase), compared with its own bid of A$1.47, based on Wednesday's closing price for AngloGold on the NYSE.

Normandy shares closed Thursday at A$1.56, a gain of 10 cents or 6.85 percent.

In a statement to the Australian Stock Exchange Thursday, AngloGold said its combination with Normandy "offers a compelling strategic fit of assets, a substantial high dividend and the real possibility of a significant share price growth".

Board recommends against AngloGold

However Normandy executive chairman Robert de Crespigny told the company's annual general meeting that he and the other board members planned to accept the Newmont offer.

"We will be recommending that Normandy shareholders reject the AngloGold offer," he said.

But AngloGold, headed by Bobby Godsell, left the door open to a higher bid, saying it would consider the Newmont proposal and "respond appropriately in due course".

Normandy, based in Adelaide, is Australia's largest gold producer, generating more than 2 million ounces of gold a year.

Newmont is a leading gold producer, with operations in eight countries including the United States, Canada and Mexico.

The two deals would lift Newmont to the number-one spot in gold reserves and production, a spokesman said. The combined three companies are valued at $9.1 billion, the spokesman said.