AngloGold to challenge Newmont bid

SYDNEY, Australia -- South Africa's AngloGold said Monday it will challenge a rival bid for Australian gold producer Normandy Mining from Newmont Mining of the U.S.

In a statement to the Australian Stock Exchange, AngloGold said it would initiate action via the Australian Takeovers Panel to challenge aspects of Newmont's counter offer.

Newmont's scrip bid for Normandy was initially valued at just under $2 billion (Aust.$3.8 billion), topping a $1.67 billion (A$3.2 billion) scrip offer by AngloGold.

Newmont is also offering another $2.58 billion in shares to buy Canada's Franco-Nevada Mining Corp, which owns 19.9 percent of Normandy.

Based on the latest share prices, Newmont's bid is worth A$3.31 billion, or A$1.48 a share, while the AngloGold offer is worth A$3.17 billion, or A$1.42 a share.

Normandy's board has recommended that shareholders accept the Newmont offer.

AngloGold, headed by Bobby Godsell, is the world's largest gold producer, while Newmont has extensive operations in the U.S., Canada, Mexico and five other countries.

Offer a 'high risk proposition'

"AngloGold considers that Newmont's offer is a high risk proposition for Normandy shareholders," AngloGold's chief financial officer Jonathan Best said in a statement.

Parts of the Newmont offer "contravened fundamental aspects" of Australian takeover law and policy, Best said.

The Takeovers Panel, established last year to replace court hearings over some corporate matters, has the power to block takeovers.

AngloGold asserted that the merger proposal with Franco-Nevada, a Toronto-based gold royalty company, was pitched at a significant premium to Franco-Nevada's shares and underlying value of its assets.

AngloGold said it will ask the Takeovers Panel to set aside an option agreement between Newmont and Franco-Nevada over 19.9 percent of Normandy's shares.

Shares in Normandy closed a cent lower at A$1.54 in a stronger overall market.

Reuters contributed to this report.