| Tue 11 Jan 2005, 17:03 | | HARMONY"S HOSTILE OFFER SHOULD BE ABANDONED" |
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GOLD FIELDS LIMITED - `HARMONY`S HOSTILE OFFER SHOULD BE ABANDONED`
GOLD FIELDS LIMITED
Registration number: 1968/004880/06
ISIN: ZAE000018123 JSE Code: GFI
(`Gold Fields` or the `company`)
`HARMONY`S HOSTILE OFFER SHOULD BE ABANDONED`
Johannesburg, 11 January 2005. The Board of Directors of Gold Fields Limited
(GFI: JSE and NYSE) wishes to reiterate its position regarding the unsolicited
hostile offer from Harmony Gold Mining Company Limited.
The Board is convinced that Gold Fields` shareholders share its view that
Harmony`s hostile offer has little merit, as is evidenced by the fact that only
11.5% of Gold Fields` shareholders accepted Harmony`s Early Settlement Offer,
and, in order to stop the ongoing value destruction for shareholders of both
companies, should be abandoned.
The Board of Gold Fields remains committed to maximising value for all of Gold
Fields` shareholders. The Board believes that the Harmony offer does not
represent a fair value for Gold Fields; takes no account of the high quality of
Gold Fields` asset base; does not reflect the benefits that successful
international diversification has brought to Gold Fields` shareholders; and does
not reflect the troubled financial and operational condition of Harmony, nor the
positive operating trend that Gold Fields is experiencing.
Shareholders are advised that the Board of Gold Fields continues to oppose
Harmony`s hostile offer vigorously, as the Board believes:
1. The hostile offer grossly undervalues Gold Fields; consists of only
Harmony`s over-valued shares with no cash element; and offers no control premium
to Gold Fields` shareholders;
2. Harmony`s management model, the so-called `Harmony Way`, is flawed and
unsuited for the challenges presented by Gold Fields` complex, long-life and
deep level South African mining operations;
3. Harmony does not have the vision, management depth, or skills and
capabilities to manage a global mining company, as they have effectively
demonstrated through their poor track record of international expansion over the
past decade;
4. Harmony`s financial position is increasingly troubled, as is evidenced by
its interest costs exceeding the cash flow generated by its operations. The Gold
Fields Board believes that this is seriously impairing Harmony`s balance sheet
and will threaten the viability of any combined entity. At the current rand gold
price nearly half of Harmony`s production is making operating losses;
5. Despite Harmony`s aggressive marketing and reporting practices its business
model has failed both in South Africa and internationally. The latest Harmony
assertion that CONOPS is the panacea that will save Harmony, is now being
exposed with the breakdown over the Christmas period of CONOPS at the Free State
operations, potentially resulting in significant lost production; and
6. An independent Gold Fields offers shareholders a solid and transparent
investment vehicle with more exciting growth prospects than the combination
proposed by Harmony.
The Board recommends that Gold Fields` shareholders and ADR holders should
continue to reject the Harmony offer, should not tender their shares or ADRs,
and should continue to reap the benefits of a well managed, performance
focussed, internationally diversified South African champion - Gold Fields.
Possible Alternative Transactions
Following the discussions held in Moscow late in December 2004, Gold Fields and
Harmony have agreed to engage in discussions with a view to exploring possible
alternative transactions to the current Harmony offer. At this stage no viable
alternatives have been identified.
Ian Cockerill, Chief Executive Officer of Gold Fields, said,
`Gold Fields will, in good faith and in the interests of its shareholders,
continue to engage in the discussions with Harmony while, simultaneously,
pursuing a number of parallel yet independent initiatives to create value
enhancing options for all shareholders.`
`To be acceptable any alternative transaction with Harmony will have to be
executed at fair value; carried out on the basis of full due diligence; and deal
with Harmony`s loss making and marginal assets and impaired balance sheet`.
`Shareholders are cautioned that discussions with Harmony are at an early stage
and are exploratory in nature. There can be no assurance that a mutually
acceptable alternative transaction will be found`.
`While this process is underway I urge shareholders to continue to reject
Harmony`s derisory offer as it significantly undervalues Gold Fields.`
ends
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.
This document contains `forward-looking statements` with respect to Gold Fields`
financial condition, results of operations, business strategies, operating
efficiencies, competitive position, growth opportunities for existing services,
plans and objectives of management, markets for stock and other matters.
Statements in this document that are not historical facts are `forward-looking
statements`.
These forward-looking statements, including, among others, those relating to the
future business prospects, revenues and income of Gold Fields, wherever they may
occur in this presentation, are necessarily estimates reflecting the best
judgment of the senior management of Gold Fields and involve a number of risks
and uncertainties that could cause actual results to differ materially from
those suggested by the forward-looking statements. As a consequence, these
forward-looking statements should be considered in light of various important
factors, including those set forth materials filed with or furnished to the SEC
from time to time, including Gold Fields` most recent Annual Report on Form 20-
F.
Important factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements include,
without limitation: overall economic and business conditions in South Africa,
Ghana, Australia and elsewhere; the ability to achieve anticipated efficiencies
and other cost savings in connection with past and future acquisitions; the
success of exploration and development activities; decreases in the market price
of gold; the occurrence of hazards associated with underground and surface gold
mining; the occurrence of labor disruptions; availability, terms and deployment
of capital; changes in relevant government regulations, particularly
environmental regulations and potential new legislation affecting mining and
mineral rights; fluctuations in exchange rates, currency devaluations and other
macroeconomic monetary policies; and political instability in South Africa,
Ghana and regionally.
Gold Fields undertakes no obligation to update publicly or release any revisions
to these forward-looking statements to reflect events or circumstances after the
date of this document or to reflect the occurrence of unanticipated events.
Information included in this document relating to Harmony and its business has
been derived solely from publicly available sources. While Gold Fields has
included information in this document regarding Harmony that is known to Gold
Fields based on publicly available information, Gold Fields has not had access
to non-public information regarding Harmony and could not use such information
for the purpose of preparing this document. Although Gold Fields is not aware of
anything that would indicate that statements relating to Harmony contained in
this document are inaccurate or incomplete, Gold Fields is not in a position to
verify information concerning Harmony. Gold Fields and its directors and
officers are not aware of any errors in such information. Subject to the
foregoing and to the maximum extent permitted by law, Gold Fields and its
directors and officers disclaim all liability for information concerning Harmony
included in this document.
11 January 2005
Sponsor: JP Morgan
