Opinion ID: 2189910
Heading Depth: 2
Heading Rank: 2

Heading: The Gold Fields Threat

Text: Gold Fields did not make a public bid for Newmont, and in more recent years there appears to have been a congenial relationship between the two companies. From the outset Gold Fields publicly expressed its support for the Newmont management. A Gold Fields press release stated: Consolidated Gold Fields has had a long, close and valued relationship with Newmont. Although Ivanhoe Partners' actions give Gold Fields the right to terminate the standstill agreement, we do not intend to exercise that right at this time, and we have no wish to seek control of Newmont. We strongly support Newmont management and believe it to be in our interest as the largest shareholder, and in the interest of all Newmont shareholders, that management be allowed to continue to direct Newmont's affairs.... Throughout the weeks of harried activity Gold Fields continued to publicly support Newmont's management. Despite this, Newmont contends that it was threatened by the stark possibility that Gold Fields would cancel the 1983 standstill agreement and acquire control of the company, thus leaving the remaining shareholders without protection on the back end. The record is replete with examples of the reality of this threat. A clear danger was posed by Ivanhoe's deliberate acquisition of 9.95% of Newmont shares, designed to free Gold Fields from the agreement, thereby permitting Ivanhoe and Gold Fields to ally themselves against Newmont. But even without Ivanhoe, Gold Fields now could wrest control away from the public shareholders. In addition, as the Newmont board was aware, Gold Fields had the necessary financial backing to unilaterally sweep the street and obtain control of Newmont. See Ivanhoe Partners, 533 A.2d at 607. Finally, the threat which Gold Fields posed was real. The Gold Fields board had in fact paused to weigh its options. Throughout these maneuvers it had considered in earnest the possibility of either independently purchasing control of Newmont or selling its interest to Ivanhoe. Id. at 595.