Newmont''s acquisition of Normandy seen putting a floor under gold

By Darren Schuettler and Sophie Hares

JOHANNESBURG/SYDNEY, Jan 3 (Reuters) -- Newmont Mining
looked poised to win a takeover battle for Australia's
Normandy Mining with a sweetened bid on Thursday, as
AngloGold Ltd refused to up its latest offer.

U.S.-based Newmont had earlier boosted the cash element
of its offer by 10 Australian cents per share, with the Normandy
board recommending the A$4.3 billion (U.S. $2.2 billion) offer.

Normandy, Australia's biggest gold miner, is a sought-after
prize as its annual 2 million ounces of production will make the
winning bidder the world's largest producer of gold -- a position
currently held by the South African group.

Newmont is now offering 50 cents cash plus 0.0385 Newmont
shares for each Normandy share, valuing the firm at A$1.93
per share. Normandy shares are currently trading at around
A$1.83.

The Newmont bid tops AngloGold's cash and scrip bid, which
values Normandy at A$1.81 a share or A$4.04 billion, based
on latest closing prices.

AngloGold said it would not increase its offer, leaving the way
clear for Newmont to clinch the deal.

quot;AngloGold's offer is full and fair and the company has no
basis upon which it could justify an increase in its offer,quot;
AngloGold Chairman and CEO Bobby Godsell said in a
statement.

Shares in AngloGold, majority-owned by London-based
Anglo American Plc, extended the morning's sharp gains to
more than 5 percent immediately after the announcement.

By 1430 GMT the shares were up 3.7 percent at 447 rand,
outperforming a 2.9 percent gain by Johannesburg's gold
index.

AngloGold shares had risen earlier amid investor
expectations that the South African firm would not overpay
for the Australian miner. They also benefited from the weaker
rand.

quot;I think they've drawn the line. I don't think they can justify to
Anglo or their own shareholders going any further,quot; said
HSBC Securities analyst Rob Edwards.

AngloGold has argued its bid offers better value because
the South African firm has a stronger track record of profitability,
and generating cash to reinvest and pay dividends.

quot;I don't think it's a done deal, I think AngloGold will get some
(Normandy) shares,quot; Edwards said.

Newmont shares, which closed at US$19.09 on Wednesday,
were almost 2 percent lower just after the New York opening,
losing 36 cents to stand at $18.73.

A steep fall in Newmont's share price would appear to be
AngloGold's last hope of winning the bid battle if it will not
increase the cash component of its own offer.

Newmont said its bid offered better value for shareholders
in the Australian company.

quot;Our bid is clearly superior to AngloGold's and provides
Normandy shareholders significantly higher overall value,
approximately 67 percent more cash up front and the ability
to participate in the world's premier gold company,quot; Wayne
Murdy, Newmont's chief executive said earlier in a statement.

Newmont's latest offer is the sixth bid for Normandy and tops
an independent A$1.48-A$1.88 a share valuation at the start
of the four-month takeover battle.

Normandy Chief Executive Robert Champion de Crespigny
said Newmont's trading liquidity and planned acquisition of
Canada's Franco-Nevada Mining Corp enhanced the
long-term value of the deal over AngloGold's offer.

quot;The revised Newmont bid continues to be superior to the
offer by AngloGold and has the full support of the Normandy
board,quot; de Crespigny said in a statement.

Newmont, which would fund the cash component under its
existing US$600 million revolving credit facility, said it
was on track to complete both the Normandy and
Franco-Nevada acquisitions in mid-February.

AngloGold is backed by Canada's Barrick Gold Corp,
which has said it would cooperate with the South African
miner on operations in Australia and Tanzania.

AngloGold says its alliance with Barrick would deliver
synergies of A$220 million in the medium term, enough
to compensate for the higher Normandy offer it made a
week ago.