Hostile Bid for Consolidated Gold Fields Clears Hurdle

A hostile $4.9-billion offer for Consolidated Gold Fields PLC by South African-controlled Minorco SA cleared a major roadblock Thursday when the British government gave it a green light.

The Monopolies and Mergers Commission decided that the offer for the London-based mining and minerals company--which would be Britain’s biggest takeover--would not be against the public interest, the Department of Trade and Industry said.

However, the bid faces at least one other major obstacle in the United States where a U.S. Circuit Court of Appeals in New York is deciding whether to uphold a lower court injunction that blocks the merger on U.S. antitrust grounds.

“At the moment, the injunction is the only legal restraint that prohibits Minorco from acquiring more than 30% of Consolidated Gold Fields,” said Jeremy Epstein, a New York lawyer for Minorco.

Newport Beach Firm

Consolidated generates half its income from U.S. operations, primarily ARC America Corp., a wholly owned Newport Beach construction materials firm, and Newmont Mining Corp. in New York, the nation’s largest gold-mining firm in which Consolidated has a 49% stake.

While Minorco has said it would sell off a number of Consolidated’s subsidiaries, it has also said it plans to keep ARC America and Gold Fields Mining Corp.

Minorco, which is based in Luxembourg and has ties with South Africa’s Oppenheimer family, already holds 29.6% of Consolidated’s stock. It has 21 days now to renew the bid, which automatically lapsed when it was referred to the commission.

Minorco said it has not yet decided whether to renew its bid, but Consolidated Gold Fields stock moved up quickly on expectations that Minorco would sweeten its offer. On London’s Stock Exchange, Consolidated Gold Fields’ shares jumped 1.17 (or $2.05) a share to 14.20 (or $24.80) a share. Minorco’s shares rose 14 pence (25 cents) to 731 pence ($12.79).

A renewed bid could face other hurdles beyond the courts.

If the appellate court were to clear the way for a renewed bid, Consolidated may again ask the White House to act under the Defense Production Act by starting a national security investigation that could lead to a ban on any sale of U.S. assets to Minorco.

The Reagan Administration declined to act on an earlier request because the offer had lapsed after the British Monopolies and Mergers Commission agreed to investigate. But the Administration warned Minorco that a renewed bid could trigger a U.S. investigation.

In addition, said Antony P. Hitchens, a managing director and chief financial officer of Consolidated, the European Economic Commission is reviewing the merger also and could block it. The EEC became involved because a merger would cross country boundaries.

The Oppenheimer family’s gold-mining giant Anglo American Corp. and its sister diamond group De Beers Consolidated Mines Ltd. own 60% of Minorco’s shares.

Times staff writer James S. Granelli in Orange County contributed to this report.