Newmont wraps up Franco acquisition

Newmont Mining (NEM-T) announced on Sunday that it has wrapped up one prong of its proposed three-way merger deal by acquiring Toronto’s Franco-Nevada Mining effective Feb. 16, 2002.

Newmont’s merger with Franco-Nevada and bid for all of the shares of Normandy Mining (NDY-T) became unconditional on Friday after the Denver-based company announced that it had acquired a relevant interest in more than 66% of the Australian miner’s shares. The Franco portion of the deal had been conditional upon Newmont getting 50.1% of Normandy’s shares.

Under the deal with Franco, shareholders were offered 0.8 of a Newmont share or 0.80 of an exchangeable share (each of which are exchangeable at any time for one Newmont share) for each Franco share held. Franco shareholders voted 98.74% in favour of the merger on Jan. 30.

Franco-Nevada’s shares will cease trading on the Toronto Stock Exchange at the close of trading on Feb. 19. They will be replaced on Feb. 20 by Newmont’s exchangeable shares under the symbol NMC.

Newmont’s bid for Normandy shares, which includes a cash sweetener of A50 per share on top of 0.0385 of a share for every Normandy share, is scheduled to expire on Feb. 26 at 7 P.M. Sydney time. Newmont plans to pay all shareholders accepting its offer by the deadline within five business days of their deposit.

Newmont says that, “based on the level and pace of the acceptances of its bid, Newmont expects that it will exercise its rights under Australian company legislation to compulsorily acquire any Normandy shares that are not owned by Newmont or its affiliates at the expiration of the bid.”

To compulsorily acquired Normandy shares not tendered to its offer, Newmont needs to obtain 90% of Normandy shares.

Newmont says that shares acquired compulsorily would receive the same consideration as those acquired under its bid, but that shareholders, “may need to wait for the compulsory acquisition process to complete and payment to be made, which may take a month or more.”