| Thu 9 Dec 2004, 15:12 | | GOLD FIELDS BOARD REJECTS TALKS WITH HARMONY |
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GOLD FIELDS LIMITED - GOLD FIELDS BOARD REJECTS TALKS WITH HARMONY
Media Release
Gold Fields Limited
(Incorporated in the Republic of South Africa)
Registration number: 1968/004880/06
JSE code: GFI ISIN: ZAE000018123
(`Gold Fields`)
GOLD FIELDS BOARD REJECTS TALKS WITH HARMONY
Johannesburg, 9 December 2004. The Board of Directors of Gold Fields Limited
(GFI: JSE and NYSE today rejected suggestions made in the media by Harmony Gold
Mining Company Limited (`Harmony`) that the two companies should enter into
friendly discussions. It is the Board`s view that Harmony`s offer, with only
11.8% acceptances, has already been overwhelmingly rejected by Gold Fields`
shareholders and does not merit any further discussion. As currently
structured, the offer:
- grossly undervalues Gold Fields;
- consists only of Harmony`s overvalued shares with no cash element; and
offers no control premium.
Gold Fields Chief Executive Ian Cockerill said: `We don`t consider this offer
to be the basis for serious discussion. The Harmony offer remains woefully short
on value and takes no account of the value inherent in Gold Fields high quality
asset base. On this basis the Board believes it cannot recommend that our
shareholders accept this offer. Instead, we believe shareholders should reject
Harmony`s offer and protect value by keeping their Gold Fields shares.
The termination of the IAMGold transaction in no way changes our view on the
Harmony offer.`
The Board does not believe that there is any basis for discussion until and
unless:
- Harmony substantially increases its offer to reflect Gold Fields` value;
Gold Fields shareholders receive Harmony`s independently audited reserves and
- resources statement, which Harmony promised to publish early in December
2004;
- Harmony consents to a comprehensive commercial due diligence on all of its
assets, and in particular allows Gold Fields access to its reserves and life of
mine plan; and
- All of Harmony`s loss-making and short-life shafts are excised from any
proposal for discussion.
The Board also notes that as of 8 December 2004, Harmony`s offer is at a 5.8%
discount to Gold Fields` share price. Furthermore, since 18 October 2004, the
offer has destroyed an aggregate of R16bn in market capitalisation for both Gold
Fields and Harmony. In contrast, the gold price has risen US$18.54 per ounce or
4.4% in the same time period.
Cockerill added: `We believe Harmony cannot complete this ill-conceived offer,
so it`s hardly surprising that they so desperately want to talk. We indicated
in our initial response to Harmony`s hostile bid that fair value for Gold
Fields, even before any premium is factored in, would be in excess of 1.73
Harmony shares for each Gold Fields share, at a R85000 /kg gold price. The Rand
gold price has since decreased to R83000/kg, so clearly a fair value offer now
must be higher than 1.73, plus a control premium.`
He added, `Our shareholders must also have complete and transparent information
about Harmony`s reserves and resources and about its operations. Otherwise, they
cannot possibly make an informed decision on this offer. We call upon Harmony
to immediately allow its reserves to be independently reviewed by Gold Fields.
With no end in sight to the massive value destruction caused by Harmony`s offer,
coupled with Harmony`s continuing silence as to the true state of its reserves
and resources, Gold Fields believes that the current offer does not merit
further discussion.
-ends-
Important information:
In the United States, Gold Fields Limited (`Gold Fields`) has filed a
Solicitation/Recommendation Statement with the Securities and Exchange
Commission (the `SEC`) on Schedule 14D-9 and holders of the Gold Fields Ordinary
Shares and American Depositary Shares are advised to read it as it contains
important information. Copies of the Schedule 14D-9 and other related documents
filed by Gold Fields are available free of charge on the SEC`s website at
http://www.sec.gov. Any documents filed by Harmony Gold Mining Company Limited,
including any registration statement on Form F-4 (including any prospectus
contained therein) and related exchange offer materials as well as its Tender
Offer Statement on Schedule TO, will also be available free of charge on the
SEC`s website.
The directors of Gold Fields accept responsibility for the information contained
in this document. To the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case) the information contained in
this document is in accordance with the facts and does not omit anything likely
to affect the import of such information.
Copies of this document are not being made available, and must not be mailed,
forwarded, transmitted or otherwise distributed or sent in or into Australia,
Canada, Japan, the Republic of Ireland or any other jurisdiction in which it is
illegal to make this document available and persons receiving this document
(including custodians, nominees and trustees) must not distribute, forward,
mail, transmit or send it in or into or from Australia, Canada, Japan, the
Republic of Ireland or any such other jurisdiction.
Date: 09/12/2004 02:52:06 PM
Produced by the JSE SENS Department
