Norilsk spin-off could be good news for Gold Fields
John Fraser
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Resources Editor
A MOVE by Gold Fields’ largest shareholder to spin off its gold assets may be good news for the miner in its battle against a hostile takeover from rival Harmony, say analysts.
Norilsk Nickel, which owns 20% of Gold Fields, is to sell its gold assets to existing investors. Analysts said yesterday this could be preparing the ground for a retreat from an undertaking by the Russian resources company to sell its Gold Fields shares to Harmony.
Harmony launched a hostile bid for Gold Fields last October, announcing an irrevocable accord with Norilsk, in terms of which it would accept the Harmony offer once Harmony’s stake in Gold Fields rose to just under 30%.
The irrevocable undertaking has one more month to run, expiring on May 20, and it is not clear whether it will be extended.
Bloomberg reported from Moscow yesterday that spinning off the Norilsk gold assets would not involve an initial public offering.
Denis Morozov, Norilsk’s deputy CE, said: “It will be done through reorganisation, with shareholders’ approval, and the new company will have the same investor base as Norilsk Nickel.”
Norilsk had said on Monday that its board proposed the creation of a new gold company combining its Polyus subsidiary, Russia’s largest gold producer, with its 20% stake in Gold Fields.
Investors, who would get one share of the gold company for each Norilsk share, would vote on the spin-off in September, Norilsk said.
Norilsk had not decided which international exchange to use.
Morozov would not comment on the implications of Norilsk’s plan for a takeover bid for Gold Fields.
Norilsk had received Harmony’s approval to transfer its Gold Fields stake to a separate unit, he said.
Harmony spokesman Brenton Saunders said yesterday that the deal “has nothing to do with us”.
“It would only interest us if it affected the status of the irrevocable, which it doesn’t,” Saunders said. “That process is absolutely and completely independent of our bid for Gold Fields and our irrevocable (accord) with Norilsk.”
Norilsk told I-Net on Monday that if it were to sell its stake in Gold Fields, the Harmony shares it would receive in return would be housed in the new gold vehicle.
“The setting up of this separate gold vehicle has been Norilsk’s stated strategy for two years,” said a Johannesburg gold analyst.
He said if Harmony succeeded in taking over Gold Fields, Norilsk could use the new vehicle to do a deal involving Gold Fields’ international assets, which Harmony would be expected to dispose of.
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