AngloGold retreats from Normandy war

AngloGold (AU-N) has withdrawn from the battle for Normandy Mining (NDY-T), leaving a victory path wide open for rival Newmont Mining (NEM-N).

On January 18, when its bid closed, AngloGold had just 7.1% of the Aussie miner — well below the level needed to legally protect its stake should Newmont acquire the remainder. In Australia, a takeover bidder can invoke the country’s compulsory acquisition rules once it has acquired 90% of the target company.

Newmont is offering A50 and 0.0385 of a share for every Normandy share, versus AngloGold’s A30 and 0.0215 of a share. It also plans to take over Franco-Nevada Mining, at a ratio of 0.80-to-1, if it nabs more than 50% of Normandy.

Newmont has scheduled February 13 for a shareholder vote and will close the offers two days later. Franco shareholders will have decided their fate well before then.

Franco and Normandy’s board of directors have pledged their Normandy shares to Newmont to ensure it of a minimum 22% acceptance level. Franco’s board has all but ensured its takeover by Newmont.

Should Newmont nab Normandy’s two million ounces of annual production, it replaces AngloGold as the world’s largest gold producer. Franco’s acquisition adds the distinctions of the most leveraged producer to gold, largest property holder and biggest mining royalty company.