Further Application in Relation to Break Fees in Newmont Bid for Normandy

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The Panel advises that it yesterday received a further application by AngloGold in relation to the proposed bid by Newmont Mining Corporation for Normandy. The application seeks a declaration of unacceptable circumstances in relation to a break fee which was agreed in a deed of undertaking dated 14 November 2001 between Normandy and Newmont.

Under the break fee arrangement Normandy agrees, in certain circumstances where Newmont's bid is not successful, to pay various costs incurred by Newmont up to a cap of A$38.33 million.

AngloGold contends that the break fee arrangement under the deed is unacceptable because:

  • The amount of the Normandy break fee itself (approximately 1%) is too large given that Newmont's proposed bid is a high value bid and Newmont is also entitled to a break fee of US$20 million from Franco-Nevada in the event that Franco-Nevada sells shares it holds in Normandy into a competing takeover offer for Normandy; and
  • Normandy's directors did not insist on a fiduciary duties exception to the break fee applying if they considered the break fee was no longer in the interests of Normandy's shareholders.

AngloGold has requested that the Panel make an order canceling the deed of undertaking or alternatively, reducing the amount of the Normandy break fee.

Sitting Panel

The sitting Panel in this matter is constituted by Mr David Gonski (sitting President), Ms Meredith Hellicar (sitting Deputy President) and Ms Ilana Atlas.

Nigel Morris
Director, Takeovers Panel
Level 47 Nauru House, 80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3501