Normandy mailer stymied

The Australian Takeover Panel has temporarily barred Normandy Mining (NDY-T) from mailing to its shareholders a recommendation to reject a takeover bid from South Africa’s Anglogold (AU-N), reports the National Post. The ban will run until Monday, as the panel continues to consider AngloGold’s complaint.

The decision came after Anglogold petitioned the panel saying that Normandy’s endorsement of Denver, Colorado-based Newmont Mining‘s (NEM-N) competing offer has overstated the bid’s value, as the offer varies with changing stock prices. Additionally, the panel could order Normandy to provide shareholders with additional disclosure.

AngloGold spokesman Steve Lenahan told the National Post, “Normandy’s statement is misleading because it characterizes Newmont’s offer as being worth A$1.70 per share, when in actual fact it has been fluctuating.”

Anglogold’s offer (announced Sept. 5) stands at 2.15 AngloGold shares for every 100 Normandy shares. Based on each shares’ closing price on Sept. 4, the deal values Normandy at A$3.2 billion.

On Nov. 14, Newmont proposed a three-way deal involving itself, Normandy and Franco-Nevada Mining (FN-T). Under the deal Newmont has offered Normandy shareholders 0.0385 of a Newmont share for every share tendered. The offer also includes a cash bonus of A5 per share if more than 90% of the shares are tendered to the offer. Including the cash bonus, the offer values Normandy at A$3.8 billion, a premium of 21% over an earlier bid by AngloGold.

The Newmont bid has the advantage with Franco’s agreement to tender its 19.9% stake in Normandy. Similarly, Normandy’s chairman Robert Champion de Crespigny, who holds about 3%, has committed his shares.

The Franco portion of the three-way deal kicks if Newmont acquires 50.1% of Normandy and will follow an exchange ratio of 0.8-to-1. Both Normandy and Franco-Nevada boards have endorsed Newmont’s bid. Franco’s chairman Seymour Schulich and President Pierre Lassonde have agreed to hold 70% of their personal holdings in the merged entity in escrow.

While the Newmont bid was worth more at the time of its announcement, the two competing bids have since come in line with one another as the markets have reacted to the news.

Anglo, which is considering its options, has not ruled out adding a cash sweetener to its bid.

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