Normandy Nos. 3 & 4 - Break Fees and Collateral Benefit [07/12/2001] The Takeovers Panel

Friday, 07 December 2001

NORMANDY Nos. 3 & 4 - BREAK FEES AND COLLATERAL BENEFIT

The Panel advises that it has declined to make a declaration of unacceptable circumstances in relation to one of the applications by AngloGold concerning the proposed bid by Newmont Mining Corporation for Normandy Mining (the Normandy No. 3 application).

The Panel considers that the recent events concerning bids for control of Normandy indicate that there is active competition for control of Normandy, including since the announcement of the break fees and other lock-up devices agreed in a Deed of Undertaking between Newmont and Normandy. Therefore, the Panel considers it unlikely that the relevant break fees have materially inhibited competition for Normandy.

Under the Deed Normandy has agreed to pay a break fee of A$38.33 million to Newmont if a rival offeror acquires 50.1% of Normandy or if the Normandy board fails to recommend the proposed bid by Newmont for Normandy or recommends a rival bid. Normandy has also entered into certain "no shop/no talk" agreements, and agreed to provide a security bond for payment of the break fee.

The application contained a number of other issues in relation to the structure of the lock-up devices. However, in light of its views on the competition issue, the Panel did not consider it needed to give them detailed consideration and has declined to make any declaration in relation to them.

Normandy 04

The Panel has progressed considering the application in Normandy 04, including whether the terms offered by Newmont to Franco-Nevada shareholders constitute a benefit not available to other Normandy shareholders. It has also considered a number of concerns raised by AngloGold in relation to some of the proposed conditions for Newmont's bid for Normandy. The Panel has sought further advice on the benefits issue and hopes to conclude the application by early to mid next week.

The Panel has accepted that a number of clarifications offered by Newmont will resolve uncertainty or concerns that may have existed in relation to the conditions in its bid as initially announced by Newmont .

The Panel's reasons for decision will be available shortly on the Panel's website http://www.takeovers.gov.au/Content/Decisions/decisions.asp

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
nigel.morris@takeovers.gov.au