Consolidated Gold Fields Plc v. Minorco, S.A.

Abstract

Minorco, S.A., a Luxembourg mining company allegedly controlled by South African interests, commenced a tender offer for Consolidated Gold Fields, PLC (Gold Fields), a British mining company. Gold Fields, together with its partially owned American subsidiary, Newmont Mining Corp. (Newmont), filed suit in U.S. federal district court to enjoin the tender offer. The district court held that Newmont, the affected American subsidiary, had standing to raise an antitrust claim and issued a preliminary injunction restraining the tender offer. The district court dismissed a claim based on alleged violation of U.S. securities laws for lack of subject matter jurisdiction and held that Gold Fields, as the target company, did not itself have standing to raise an antitrust claim. On appeal, the Court of Appeals for the Second Circuit (per Newman, J.) reversed in part and affirmed in part, holding that: (1) Newmont had standing under the U.S. antitrust laws to object to the tender offer; (2) Gold Fields also had antitrust standing (by 2-1); and (3) the U.S. courts did have subject matter jurisdiction over Gold Fields’s U.S. securities law claims. Accordingly, the court of appeals upheld the injunction and returned the case to the lower court for further proceedings. On remand, the district court found that inasmuch as Gold Fields had not demonstrated a likelihood that its U.S. securities law claims would be successful on the merits, those claims did not merit an injunction. The court also ruled that Minorco had failed to demonstrate that its plan to hold separate and sell the assets of Gold Fields posing the possible antitrust problem would provide adequate protection, and so kept the injunction against the tender offer in place. As a result, even though a majority of the Gold Fields shareholders had tendered their shares to Minorco and both British and European Communities regulatory authorities had approved the transaction, Minorco was forced to abandon its tender offer.