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British Firm Wins Right to Buy Newmont : In Setback for Pickens, 'Street Sweep' Held Legal

October 16, 1987|From Reuters

WILMINGTON, Del. — A state judge Thursday upheld the legality of a British company's purchase of a major chunk of Newmont Mining Corp. in a key ruling against a hostile takeover attempt by T. Boone Pickens Jr.

Pickens' group, called Ivanhoe Partners, launched the bid for Newmont, a major gold producer, in August, touching off a protracted battle.

Newmont was rescued by Consolidated Gold Fields, a big London-based mining company that is Newmont's biggest stockholder. Through purchases on the open market, Consolidated bought 15.6 million shares of Newmont, increasing its stake in what is called a "street sweep" from 26.2% to an unassailable 49.7%.

The judge Thursday dissolved a temporary restraining order preventing Gold Fields from voting the new stock.

"To enjoin Gold Fields' now-completed stock purchases is unnecessary. The street sweep was a legally proper transaction that did not by itself involve actionable wrongdoing," Delaware Chancery Court Judge Jack Jacobs said in his ruling.

No Word on Appeal

Pickens went to court in Delaware, where Newmont is incorporated, in an effort to have the stock purchase invalidated. The judge had the shares put into escrow, awaiting Thursday's ruling.

The ruling may be appealed to the Delaware Supreme Court. Pickens, the Texas oilman noted for a string of unsuccessful but profitable corporate raids, was not available for comment on whether such an appeal would be launched.

Lawrence Hamermesh, a lawyer for Gold Fields, said: "We would all agree it (the ruling) was favorable from our point of view." Asked if he expected an appeal by Pickens, he said: "We are prepared for all sorts of contingencies, and that is obviously one of them."

Lawyers for Ivanhoe could not be reached for comment.

The judge said a restraining order was not proper because it would mean virtual victory for Pickens.

"To require Gold Fields to divest its 23% block of Newmont stock would not only undo an act that was legally proper and that would likely have occurred irrespective of any standstill agreement, but it would also effectively grant plaintiffs all the relief they might hope to gain after a final hearing," Jacobs said.

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