Panel Allows Dispatch of Normandy Target's Statement [26/11/2001] The Takeovers Panel

Monday, 26 November 2001


The Panel advises that it has today ended the interim order under section 657E of the Corporations Act that it made on 22 November 2001. Normandy Mining is now free to dispatch its target's statement. Anglogold applied last week to the Panel for an interim order concerning Normandy's target's statement in response to AngloGold's takeover bid for Normandy.

The Panel has not required Normandy to make any further disclosure at present. However, it has required Normandy to publish a supplementary statement shortly before the AngloGold bid closes, to update Normandy shareholders. It has also required Macquarie Bank to clarify the status of the statement in the Chairman's letter at the front of Normandy's target's statement that Macquarie supported the Normandy board's rejection of the AngloGold offer. The Panel has approved the terms of Macquarie's announcement.

AngloGold had asserted that in its target's statement Normandy should have:

  • quoted the implied value of a proposed takeover offer by Newmont Mining Corporation based on share prices as at the date of Normandy's target's statement ;
  • set out more clearly the uncertainties and risks which AngloGold contends may be associated with Newmont's proposed offer ; and
  • disclosed the terms of advice from Macquarie Bank which AngloGold asserts the Normandy Chairman has referred to in Normandy's target's statement.

The Panel considers that the factual disclosure in Normandy's target's statement in relation to these issues was adequate. However, the Panel has raised a number of areas where it considered Normandy could have given fuller disclosure, and areas of disclosure for future consideration.

1. Value of Newmont offer

AngloGold asserted that the Normandy board should have stated the implied value of the proposed offer by Newmont Mining Corporation as at the date of the Normandy target's statement when citing it as one of the Normandy board's reasons for recommending that Normandy shareholders reject the AngloGold bid.

The Panel accepted that Normandy's rejection of the AngloGold offer was primarily on the basis of the independent expert's report and the fact that the AngloGold offer did not, then, come within the fair range proposed by the independent expert.

The Panel has not required any further disclosure in Normandy target's statement. It considers that Normandy has included sufficient information about the date at which it calculated the assessed value of $1.70, and cautions about the possibility of changing in the value of the Newmont offer with share price fluctuations.

However, the Panel also considers that it would have been better practice for Normandy to have set out in its target's statement the value of the proposed bid by Newmont, based on the relevant share prices and conversion rates as at the date of the target's statement i.e. at 19 November 2001 the implied value of the proposed Newmont was $1.46 plus 5 cents if 90% achieved, and to have given that value equal prominence with the $1.70 derived from the 13 November announcement. Fresh information is usually preferable to staler information;

2. Macquarie Recommendation

The sitting Panel was concerned that the consent by Macquarie given in the target's statement did not refer to the statement in the chairman's letter. The Panel was concerned that the express limitations and denials in the consent given by Macquarie might appear to be contradictory to the statement in the chairman's letter.

At the request of the Panel Macquarie has written to ASX stating that Macquarie :

  • consents to the use of its name in the chairman's letter;
  • consents to the use of its name in the context that it has been used; and
  • affirms that the statement in the chairman's letter accurately represents the advice Macquarie gave to the Normandy board concerning the AngloGold bid.

3. Risks Associated with AngloGold and Newmont bids

The Panel has not required any further disclosure in the target's statement in relation to risks associated with the Newmont bid.

However, the Panel considers that it would have been better practice for Normandy to have been more even handed in its treatment of risks associated with the AngloGold bid and the proposed Newmont bid. Normandy should have acknowledged, to the extent reasonably possible, that many of the risks that it addressed in relation to the AngloGold bid would also apply to a bid by Newmont, given that both would be scrip bids by major international gold producers. In saying this the sitting Panel recognises the limitations and qualifications that the board of Normandy would have had to put on such assessment given the preliminary stages of the proposed Newmont bid. However, the sitting Panel considers that it would still have been within the competencies of the Normandy board and would have been useful for the Normandy shareholders.

The Panel notes the benchmark for critical assessment of a takeover bid that the Normandy directors have now set. It assumes that the Normandy board will clearly apply equivalent rigor if and when it is required to put a target's statement in relation to a bid by Newmont before the Normandy shareholders.

4. Closing of AngloGold bid.

The sitting Panel is aware, and concerned, that the AngloGold bid may close before any bid by Newmont is before the Normandy shareholders, and before any target's statement in relation to that bid is before the Normandy shareholders. In light of this, the sitting Panel requested and obtained an undertaking from the Normandy board that it will, if the AngloGold bid appears likely to close before such a target's statement in response to a Newmont bid is given to Normandy shareholders, issue a supplementary target's statement in sufficient time for Normandy shareholders to consider it. The sitting Panel considers that such a supplementary target's statement would need to address (based on facts, rates and prices which apply on the date of the supplementary target's statement):

  • The progress of the Newmont bid arrangements and the prospects of the bid proceeding;
  • The relative values of the AngloGold and the proposed Newmont bids;
  • The Normandy board's recommendation concerning the AngloGold bid; and
  • The board's intentions concerning the proposed Newmont bid.

Timing of Supplementary Target's Statement

The Panel recognises the work involved in preparing, printing and dispatching a supplementary target's statement to the shareholders of a large company such as Normandy. Given the desirability of the target's recommendation being based on current information, such a supplementary target's statement may only be feasibly given to ASX in the time available, rather than posted to target shareholders. The Panel would expect that the supplementary target's statement be given to the stock exchange shortly after the commencement of the final week of the bid. In such a case, the target company would also need to take appropriate steps, perhaps such as appropriate newspaper advertisements, to ensure its closing recommendation is brought to the attention of target shareholders.


If the AngloGold bid is still open at the time the Normandy target's statement is given in response to a bid by Newmont, the target's statement will need to contain a careful comparison of the two bids, including the risks of the different bids. The Panel notes that the current Normandy target's statement sets a benchmark against which such comparison could be measured.

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