Minorco Drops Bid for Gold Fields; Probe Cited

Minorco dropped its $4.9-billion hostile bid for Consolidated Gold Fields on Tuesday after the British government said it would investigate the deal’s effect on the market for strategic metals, mainly titanium and zircon.

The government referred the bid by South African-controlled Minorco to its Monopolies and Mergers Commission, a move that delays the deal while the commission takes three months or more to review the matter.

By the terms of Minorco’s bid, the offer lapsed as soon as the referral was made to the commission.

But Minorco is still interested in acquiring the British firm and will cooperate with the government during the investigation, said Jeremy Epstein, Minorco’s New York lawyer.

Minorco’s decision came the morning after a federal judge in New York issued a preliminary injunction to halt the merger on the grounds that it would likely violate U.S. antitrust laws by restraining trade in gold.

The injunction came in a lawsuit filed by the British firm and its American subsidiaries, including ARC America Corp., a construction materials firm in Newport Beach.

The American subsidiaries provided Consolidated Gold Fields with about half its revenue last year. Because of its own business interests in the United States, Minorco came under the jurisdiction of American laws.

Epstein said an appeal will be filed today to overturn the order.

One course of action that could satisfy the commission would be for Minorco to sell Consolidated Gold Fields’ interests related to the strategic metals titanium and zircon, analysts said.

Minorco has already said it plans to sell Consolidated Gold’s interests in gold production to avoid U.S. antitrust problems.

Minorco spokesmen said Newmont Mining in New York and Consolidated Gold of South Africa would be sold after an acquisition.

Consolidated Gold has raised strong objections to being acquired by a company that is South African-controlled.

Minorco is the Luxembourg-based investment arm of the South African gold and diamond mining giants, Anglo American Corp. and De Beers Consolidated Mines Ltd.

The wealthy South African Oppenheimer family holds unspecified stakes in the latter two companies, and family patriarch Harry Oppenheimer is the former chairman of Anglo American.

In its multifaceted attack on the takeover attempt, Consolidated Gold asked President Reagan to use the newly amended Defense Production Act to block the acquisition on grounds that national security interests are involved. Strategic metals are used in military equipment and weapons as well as in paints and furnaces.

At least 11 U.S. senators, one representative and two governors have asked Reagan to initiate an investigation into the deal.