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Randgold says it might consider Iamgold deal but Gold Fields won''t
By Peter Blackburn and Nicole Mordant
Reuters
Wednesday, July 21, 1004
http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=5733592
RIO DE JANEIRO/VANCOUVER -- China Minmetals
Nonferrous Metals Co. has beaten Brazil's Cia Vale do
Rio Doce in the battle to buy Noranda Inc., a Brazilian
newspaper said on Wednesday, adding more grist to a
busy rumor mill on so far hypothetical bids for the
Canadian miner.
Valor Economico, quoting unnamed sources close to
the negotiations, said that Brascan Corp., which has a
42 percent stake in Noranda, decided on Friday to sell
its stake to Minmetals.
The business daily, which has in the past five weeks
been at the forefront of speculative stories about the sale
of Noranda, said that Minmetals had offered $6 billion,
or $20 a share, for 100 percent of the copper and nickel
miner, versus a $5.4 billion offer from CVRD.
Noranda and Brascan all declined to comment on the
report, as they have consistently since the first rumors
surfaced of a CVRD bid for the world's third biggest
zinc and ninth largest copper producer.
Noranda's stock was down 1 cent at $18.33 at midday
on Wednesday in New York and up 11 Canadian cents
at C$24.25 in Toronto. The stock has gained nearly 15
percent since June 16 when the company, shortly after
the first CVRD rumors emerged, announced it had
received expressions of interest from several
unnamed suitors.
In the absence of any formal bids and company comment,
the market has become frustrated with all the rumor
and hearsay.
Eric Pelletier, a spokesman for the Ontario Securities
Commission, Canada's senior regulator, said that it is
usual for the first disclosure about a deal to come from
a bidder, although it can come from a target.
He said disclosure was required if talks had reached a
"material" stage -- a level where they might be expected
to affect the value of a company's securities.
CVRD shares rose over 2 percent to 135.20 reais,
extending their gains to about 12 percent since the start
of last week when the market began to speculate it would
be outbid. CVRD was understood to have wanted a 52
percent stake in Noranda.
Christiane Viana, an analyst at BES Securities in Rio de
Janeiro, said a Minmetals victory would have a positive
impact on CVRD's share price.
"It would show that Vale calculates its investments
carefully and is not prepared to fight for Noranda and
pay any price," she said.
Canaccord Capital's Greg Barnes pointed out in a recent
research report that a bid by a Chinese company for
Noranda could raise the price because a hunger for raw
materials to feed China's economic growth could lead
its firms to overpay.
Minmetals, which has previously declined to comment
on the Noranda speculation, could not immediately be
reached.
State-run Minmetals is controlled by the mammoth China
Minmetals Corp., the country's top metals trading firm,
which also has interests in sectors from real estate to
finance. Minmetals Corp. had revenues of $11.68 billion
in 2003.
Barnes pointed out that if Minmetals does buy Noranda,
it would be by far China's largest single overseas
investment in the mining industry.
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