Anglo may miss out in bidding

Lachlan Colquhoun12 April 2012

LONDON-listed gold mining goliath Anglo American could miss out on its second major Australian target in as many years after US gold group Newmont trumped its bid for Australia's Normandy Resources for the second time with an offer priced at A$4.24bn (£1.52bn).

Denver-based Newmont today unveiled a A$900m cash sweetener in its share-and-cash bid, offering shareholders in Australia's biggest producer a 15% premium on Anglo's most recent bid. The Anglo bid has been made through gold subsidiary AngloGold, the world's biggest producer, which is 53% owned by the Anglo American parent.

Normandy chief Robert Champion de Crespigny immediately welcomed the Newmont move and urged shareholders to accept. 'The immediate value offered by Newmont is superior to that offered by AngloGold and at the top of the value range established in an independent valuation,' de Crespigny said.

Independent experts Grant Samuel and Associates have valued Normandy at between A$1.48 to A$1.88 a share. The new bid from Newmont, which comprises 40 cents a share in cash plus 0.0385 of a Newmont share for each Normandy share, is valued by today's market at A$1.90 per share.

Normandy shares spiked in a lacklustre Australian market to A$1.80, but closed at A$1.75 with some analysts suggesting that an Anglo counterbid could follow.

'I think the market is going to wait and see what happens, and if Anglo comes back,' said Kylie Harding, of ABN Amro in Sydney.

Anglo failed in last year's A$3.5bn bid for Australian iron ore miner North, and was defeated by Rio Tinto after a prolonged bidding battle.

Anglo started the bidding for Normandy in September, offering a share deal valued at around A$1.44 a share. Newmont made a counterbid, which was improved by Anglo last month with a 20 cents a share cash sweetener. Victory for Newmont would give it control of around 20% of the world gold mining industry.

'We are creating the Coca-Cola brand name of this industry,' said Pierre Lassonde, president of Normandy's largest shareholder, Canada's Franco-Nevada, which is also being acquired by Newmont as part of the planned deal.

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