Harmony`s Swanepoel credits Gold Fields` defence tactics
By Nicky Smith
Bernard Swanepoel, the chief executive of Harmony, which has been locked in a vicious hostile bid for the past six months, said yesterday that Gold Fields` defence during the bid had `worked well`.
`Once they got over the shock of the first two weeks ... it [the defence] has worked, in my personal opinion, quite well,` he said, adding that Gold Fields would have to address Harmony`s bid on its merits at some point.
Swanepoel was speaking at the release of Ernst & Young`s review of merger and acquisition activity for the past year.
Harmony launched its bid to create the world`s largest gold company on October 18 last year. Ernst & Young described the bid as `one of the most bitterly contested hostile battles we have seen in this country`.
Swanepoel slammed the South African regulatory environment for playing into the hands Gold Fields bid defence tactics.
`The often contradictory and uncoordinated regulations and legislation governing mergers has been, in our experience, disappointing and contrary to commercial logic - adding significantly to Gold Fields` ability to fabricate and perpetuate controversy,` he said.
`They never had to win a legal battle, they just had to drag the process out.`
According to the bid programme drawn up by Harmony`s advisers, this deal should have been put to bed by January 18.
Central to Swanepoel`s criticism is the fact the takeover code has a 60-day minimum period, while the competition process has a 90-day minimum period. This meant that a bidding company could never have a minimum acceptance condition before competition approval was given.
Swanepoel urged regulators to review and amend the contradicting rules, with a view to harmonising the takeover code with the Competition Act.
`In the eyes of the world South Africa has already become less competitive because of the behaviour during this bid,` Swanepoel said, adding: `We will see a hell of a lot fewer deals.`
This was the reason why `international players do not touch South Africa`.
Swanepoel also grilled the local press, saying journalists had allowed themselves to become `conflicted`, for example by accepting invitations from Gold Fields to attend cricket at the Wanderers.
Gold Fields shares closed R1.25 lower at R68.56, while Harmony shares shed 44c to close at R47.56 yesterday.
The gold mining sector closed 0.97 percent weaker.
Published on the web by Business Report on April 8, 2005.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
