Newmont gets thumbs up

Newmont Mining (NEM-N) has received approval to extend its offer to Normandy’s shareholders in the U.S. and Canada, placing it on a level playing field with South Africa’s AngloGold (AU-N), which obtained permission in early November.

One Normandy American Depository Share equals 10 common shares.

Similarly, Australia’s Foreign Investment Review Board gave Newmont the green light to proceed with the takeover so long as it adheres to Normandy’s commitment to Australian Magnesium Corporation and maintains a listing plus corporate headquarters in Australia. The conditions apply to AngloGold as well.

Accordingly, Newmont has scheduled February 13 for a shareholder vote on the Normandy and subsequent Franco acquisitions. Both offers are scheduled to close two days later.

AngloGold is offering A30 and 0.0215 of an AngloGold share per Normandy share, whereas Newmont’s bid stands at A50 plus 0.0385 of a Newmont share. Newmont also plans to merge with Franco-Nevada (FN-T), at a rate of 0.8-to-1, if it acquires more than 50% of Normandy.

Franco, which owns 19.8% of Normandy, and Normandy’s board of directors have pledged their shares to Newmont. Franco shareholders will decide their fate on January 30.

Anglo’s twice-increased offer was recently extended by a week (the fourth extension since mid-Dec.); it now closes on January 18. So far, AngloGold has nabbed just 6.5% of Normandy, most on January 11. According to Australian securities law, the company needs to acquire more than 10% to prevent Newmont from evoking compulsory acquisition rules without court approval should it acquire the remainder.

Both bids are free of defeating conditions. Each has also said they would tap existing credit facilities to cover the cash component of their offer.

Whichever company wins the battle becomes the world’s largest gold producer. AngloGold currently holds that honour.

In related news, Franco has sold 5 million shares of Aber Diamond (ABZ-T) to increase its cash account by a cool $105 million. The sale leaves the royalty king with 4.98% of the diamond miner, or 1.72 million shares.

AngloGold finished the day at R461 and Newmont at US$24.95, narrowing the gap between their offers to just A1. Franco traded at $24.95, for a 2% premium to Newmont’s offer.