Franco-Nevada not keen on AngloGold’s bid

With no rival bid emerging for Normandy Mining (NDY-N), South Africa’s AngloGold‘s (AU-N) main obstacle to its proposed takeover of the Australian miner may be Toronto-based Franco-Nevada Mining (FN-T), which, with a 19.9% stake, is Normandy’s largest shareholder.

According to a Dow Jones Newswires report, Franco-Nevada is apparently “not thrilled” with and still hasn’t accepted AngloGold’s offer, which it has called “opportunistic”. The report says Franco-Nevada officials found AngloGold “arrogant” for not discussing its bid with them prior to its announcement.

Franco-Nevada came by its stake in Normandy in early April for US$48 million in cash, its one producing gold mine and a package of Australian royalties.

Bobby Godsell, AngloGold’s chief executive, says meeting Franco-Nevada is at the top of his list. Godsell expects Anglogold’s bid to win and says Franco-Nevada may make play tough.

“It’s their job to make it a hard time for us, but we have a high level of confidence of succeeding,” he says, according to DJN.

He says AngloGold may not be willing to up its bid should a rival offer surface. He believes that the current offer is fair and that it will not be sweetened. He says his company is prepared to walk away from anything.

AngloGold launched its all-share bid for Normandy on Sept. 5. The company is offering 2.15 AngloGold shares for every 100 Normandy shares. This values Normandy at A$3.2 billion (A$1.42 per share) or US$1.6 billion, based on AngloGold’s New York close on Sept. 4.

The deal, which would result in the issuance of some 48 million new AngloGold shares, represents a 29% premium to Normandy’s A$1.10 closing price on Sept. 4, though the company often traded above A$1.20 in June and July.

The transaction would create what AngloGold describes as the “first truly global gold company.” It is subject to several criteria, including:

• acceptance by holders of at least 50.1% of Normandy’s shares;
• approval by AngloGold shareholders (AngloGold’s 53.3% shareholder, Anglo American [AAUK-Q], will vote in favour of the deal);
• approval by the South African Reserve Bank; and
• approval by the Australian Foreign Investment Review Board.