G+T strikes gold with Newmont work
25 March 2002
Sydney partnership Gilbert + Tobin (G+T) scored a coup over its national firm rivals to win the role of sole Australian adviser to Newmont Mining Corporation on its multibillion-dollar acquisition of Adelaide-based Normandy Mining and Canada's Franco-Nevada Mining Corporation.
The three-way tie-up is the largest hostile cross-border resources takeover in Australian corporate history. It creates a A$9bn (£3.3bn) company and makes New York Stock Exchange-listed Newmont the world's largest producer of gold.
G&T scooped the instruction after Wachtell Lipton Rosen & Katz, US law firm for Colorado-based Newmont, carried out a market sounding in Australia. The other firms involved in the Australian end of the deal were Allens Arthur Robinson for Normandy and Freehills, which represented unsuccessful South African bidder AngloGold.
Newmont was a late entrant in the race for ownership of Normandy, turning the company's earlier negotiations with AngloGold into a hostile bidding war. The Newmont team submitted its offer some two months after AngloGold had made its initial approach on 5 September 2001.
Led by partner Garry Besson, G+T's team was formed from the M&A group, and also included partners Gary Lawler, David Brewster and Rachel Launders. The team sought additional advice from the firm's tax, litigation and general commercial departments.
Lawler says the cross-jurisdictional nature of the deal made it a particularly interesting one, and the fact that Newmont announced its bid so late in the day also kept the team on its toes.
"Newmont was at a considerable disadvantage - it was coming from a long way behind and there was a long way to make up," says Lawler.
By mid-January, when AngloGold finally withdrew its bid, the parties involved in the deal had brought an amazing seven applications before the Australian Takeovers Panel.
AngloGold put forward six issues for assessment (one against Normandy and five against Newmont), while Newmont also asked for judgment on a matter it had with AngloGold. Not one application went the way of the South Africans.
"We won six-nil, and Normandy succeeded on the other, so we were pretty happy with that," says Besson.
Arbitrageurs had also become entangled in the mess, with many investors opting to sell on-market amid the game of oneupmanship, which commenced with Newmont's entry into the fray.
On 26 February, Newmont announced that it had acquired a "relevant interest" in more than 92 per cent of Normandy's shares, and said it would exercise its rights under Australian law to compulsorily purchase the remainder.
Remaining Normandy shareholders will now receive the same terms as those who sold - A$50 (£18.40) cash and 3.85 Newmont common shares for every 100 Normandy shares. The deal remains a dramatic improvement on Newmont's initial offer of A$1.70 (63p) per share.
The Franco-Nevada acquisition was completed in early February by a scheme of arrangement that offered Newmont common stock to shareholders in the Canadian company.
Lawler said that G+T had yet to discuss the possibility of being retained as Newmont's Australian law firm, although he admitted that the company would be a prestigious long-term client.
It is thought that, in time, Newmont will sell off some of Normandy's overseas assets, work which would be lucrative for the Sydney firm.
"It's gone very well and we're hopeful of getting the role of Newmont's Australian lawyers," said Lawler. "It was very significant to get this instruction, because when transactions originate overseas, there's a propensity for the overseas clients to gravitate towards the larger firms.
"This illustrates the fact that people are starting to identify with G+T's brand as a corporate and M&A firm."