08 March 2005
Gold Fields changes tune on Harmony
John Fraser
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GOLD Fields has offered to buy the 11,5% of its own shares which were secured by Harmony in the first phase of its hostile bid last year.
Gold Fields spokesman Willie Jacobsz yesterday confirmed weekend media reports that a share buyback for the 11,5% stake could be in the offing.
However, Harmony CE Bernard Swanepoel said such an offer had not been made and said, with some finality, that Gold Fields did not intend to do so.
Arguably, the liquidation of its investment in Gold Fields would be of some benefit to Harmony, as it would shore up the balance sheet of the company at a time when it is suffering losses in some of its South African operations, and is also seeking offshore expansion.
If Harmony were to agree to such a sale, it would effectively halt the hostile takeover of Gold Fields, which was launched by Harmony in October, and which has resulted in billions of rand being wiped off the value of shares in both companies.
Jacobsz said yesterday that Harmony had been informed of Gold Fields’ willingness to buy back the stake, although he accepted a sale would require the approval of Gold Fields shareholders.
“Gold Fields has indicated on a number of occasions, and in public, that it would welcome the opportunity to purchase the shares,” he said.
Swanepoel said that if such a deal were to be made, he would expect a premium, and would base it on Gold Fields’ own valuation of the company, which is considerably higher than the value he paid for the shares in the first stage of the hostile takeover bid.
“If they make me such a cash offer, I would recommend it to my board.”
He said that no formal board meeting would be held to take a decision on whether or not to withdraw the bid for Gold Fields, as he was taking soundings from the company’s directors.
In another development, Jacobsz said there had been no deal with Norilsk Nickel of Russia to acquire the offshore assets of Gold Fields, as Swanepoel had suggested at the weekend.
Meanwhile, Swanepoel said that Harmony had received a licence to develop a new R870m mine — the Hidden Valley project in Papua New Guinea.
Construction of the open pit mine was expected to commence this year.
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