Minorco and the Maple Leafs

In that light, we take our hat off to James Capel and Co., the British broker that acted as advisor to Minorco in its failed $6.6-billion(US) bid to buy the 71% of Consolidated Gold Fields it doesn’t already own. The bid was cleared by Britain’s regulatory authorities, but the battle of the gold mining Titans was finally decided by an American court that prevented the bid on anti-trust grounds. As a result, Minorco let its offer lapse and cannot try again until February, 1990, at the earliest.

But even though the bid failed, costing Minorco who knows how much in legal and consulting fees, Capel said “a number of positive points” had emerged. What are these lessons that Minorco has paid so dearly to learn? Well, one is that “a good understanding of the various regulatory bodie s has been achieved.” One might argue that the understanding gained wasn’t quite good enough or the deal would have gone through, but that would be niggling. The understanding must be very great considering that this deal was put through unprecedented regulatory hoops in the United Kingdom and in the United States. At one point Ronald Reagan, then president, commented on the takeover bid.

Another positive point? Well, Capel says Minorco has emerged with “considerable respect for its executive officers.” One assumes there has always been considerable respect for Minorco’s management: that there probably would have been even greater respect if the bid had been successful is a trifling point.

Capel also says Minorco has attained an investor profile of which they had only dreamed prior to the bid. Bad dreams, perhaps, because the group’s failure makes Minorco’s high profile that of a famous loser, the Toronto Maple Leafs of the corporate world.

But perhaps it is not cricket to make light of whatever consolation can be found in a losing situation. It’s refreshing to see that Capel can find that silver lining, keep a stiff upper lip, and make the most of the situation. Capel obviously adheres to the philosophy espoused by the immortal poet: “Don’t worry, be happy.”

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