| Thu 9 Dec 2004, 11:31 | | Negotiated deal between Harmony, Gold Fields likel |
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Negotiated deal between Harmony, Gold Fields likely
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By John Fraser
A negotiated merger between Harmony and Gold Fields, which would replace the current hostile Harmony bid for its rival, appeared more likely last night, after talks between the chairmen of the two companies.
The meeting at Gold Fields` offices in Johannesburg followed the failure of the company to win shareholder support for the merging of its international assets with Canadian company Iamgold and Harmony`s earlier failure to acquire more than 11,8% of Gold Fields` shares in the first stage of its predatory attack on its rival.
Gold Fields chairman Chris Thompson yesterday confirmed the meeting would take place, saying Harmony chairman Patrice Motsepe had initiated it because he `wanted to break the ice`.
He said that Gold Fields would be willing to do a deal with Harmony if that involved only his rival`s better assets, and not its loss-making mines.
He said he and Motsepe were old friends and `there was no animosity, nothing`s changed`.
However, Harmony CE Bernard Swanepoel insisted that Motsepe had been urgently summoned by Thompson.
He downplayed expectations of a peace deal, saying Motsepe had told the Gold Fields chairman that Harmony`s existing offer `is going to stay on the table`.
Thompson argued that at the moment the situation was `in limbo`, suggesting Harmony would not be able to win control of Gold Fields on the basis of its current offer, as it undervalued Gold Fields.
Thompson later chaired a board meeting of Gold Fields to assess the aftermath of Tuesday`s shareholders` meeting, when the Iamgold deal was voted down.
He said that new options included a merger with a `white knight`, the selling of the international assets, or their unbundling through a new listing.
Another option was to do nothing, in the expectation that Harmony`s hostile bid would fail.
`The end game of acquiring 100% of Gold Fields is not attainable for Harmony the war is not winnable ,` Thompson said.
A deal could be worked out between Gold Fields, Harmony and Norilsk Nickel of Russia, which holds 20% of Gold Fields, he said.
`Some solution is needed, and it`s going to involve us and Norilsk and Harmony,` Thompson said.
Harmony director Ferdi Dippenaar agreed that the climate would be very different if a deal were put to
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Gold Fields shareholders that had the backing of their board, and which Harmony supported.
`It is probably time that before money is spent looking at alternatives that the parties let the dust settle, accept the result of the Gold Fields` shareholders meeting, and look at ways to put together a value proposition that appeals to all shareholders of Gold Fields and of Harmony,` he said.
Thompson said that after a deal was sealed, he would step down as Gold Fields chairman and be replaced by a black person.
In another development, it emerged yesterday that Gold Fields could have won the vote on the Iamgold deal if it had done nothing about spoilt voting forms from Sanlam and had opted not to request a proper proxy vote from Norilsk.
Norilsk is said to have voted via a faxed letter and one `big voter` supporting the deal failed to arrive.
Although Gold Fields CE Ian Cockerill never stated this publicly, Tuesday`s vote was swung against the Iamgold deal when Sanlam changed its proxy, and opposed Gold Fields` plan.
Both Motsepe and Swanepoel are members of the Sanlam board.
On Tuesday, Swanepoel denied that two had brought pressure to bear on the Sanlam management to change its decision to support the Iamgold deal.
`This was an investment decision taken by the investment structures of Sanlam.
`The Sanlam board does not deal with decisions at this level,` he said.
But even if it had won the shareholders` vote on Tuesday, Gold Fields could still have faced a legal challenge from Harmony after the chairman of the meeting refused Harmony the right to vote its shares relying on a recent ruling by the Competition Appeals Court.
Business Day
