The US mining group Newmont increased its offer for Australia's Normandy Mining yesterday, outgunning a rival bid from AngloGold in a contest that carries the crown of the world's biggest gold producer.
The latest offer, at A$1.90 a share or A$4.24bn (£1.5bn) in total, was pitched above an independent estimate of fair value for Normandy.
Hayden Bairstow, an analyst at Commerzbank said: "They are now paying over the top. It's no longer a question of value. That's gone out the window. It is now a strategic move."
Normandy is being fiercely fought over as it is seen as the last remaining attractive Australian miner. AngloGold, a subsidiary of the London-listed Anglo American empire, is keen to expand production outside its native South Africa.
An independent expert appointed by Normandy put a value of A$1.48 a share to A$1.88 a share on the company. Analysts said if AngloGold took a similarly strategic view of Normandy, the bid battle could have more rounds to come. AngloGold is also relying on a legal challenge to the Newmont bid before Australia's Takeover Panel.
AngloGold originally made an all-paper bid worth A$1.45 a share in September but was never able to win over the Australian group's board. It was trumped by a recommended offer from Newmont last month. On 29 November, Anglo pushed ahead by adding 20 cents a share cash to its offer, to take its bid to A$1.65 a share. Again the Normandy board refused to support it. Yesterday's A$1.90 Newmont offer, which came with 40 cents a share cash, again had the support of the Normandy board. Robert Champion de Crespigny, chairman and chief executive of Normandy said: "Newmont's revised offer better recognises the intrinsic and strategic value inherent within the company."
Analysts said one reason for preferring Newmont was the fact the US company was going to allow Normandy to continue to operate largely independently.Reuse content