Gold Fields to spring another legal move

JOHANNESBURG – South Africa’s Gold Fields Ltd is due to launch another legal challenge yesterday in an effort to block a hostile takeover bid by rival Harmony Gold, an industry source said.

Harmony, the world’s sixth-biggest gold producer, is seeking to create the top-ranking firm in the sector by swallowing fourth-biggest Gold Fields in a all-share deal valued at US$8 billion (N$50,4 billion). “It’s a further legal step in South Africa in addition to what they have already have done,” the source told Reuters, giving no further details.Gold Fields said late on Tuesday it had asked South Africa’s Competition Commission to block Harmony’s takeover offer, saying it was illegal.The company — which argues the bid undervalues the company and is not in the interests of shareholders — has also filed a complaint with the Securities Regulation Panel regarding the bid documents.A key issue in the takeover battle is Gold Fields’ agreed merger with Canada’s Iamgold, which Harmony wants to block, saying Gold Fields sold out too cheaply and shareholders would lose out.Gold Fields says its plan to inject its international mines into Imagold and take 70 per cent of the new company is a shrewd move, allowing a rerating and access to cheaper capital.Russia’s Norilsk Nickel, Gold Fields biggest shareholder with a 20 per cent stake, is supporting Harmony’s bid to offer 1 275 new Harmony shares for each Gold Fields share.Harmony’s bid is in two parts with the first an offer that expires on November 26 for 34,9 per cent of Gold Fields, just under the regulatory threshold for acquiring a firm.A subsequent offer to acquire remaining shares would follow.-Nampa-Reuters”It’s a further legal step in South Africa in addition to what they have already have done,” the source told Reuters, giving no further details.Gold Fields said late on Tuesday it had asked South Africa’s Competition Commission to block Harmony’s takeover offer, saying it was illegal.The company — which argues the bid undervalues the company and is not in the interests of shareholders — has also filed a complaint with the Securities Regulation Panel regarding the bid documents.A key issue in the takeover battle is Gold Fields’ agreed merger with Canada’s Iamgold, which Harmony wants to block, saying Gold Fields sold out too cheaply and shareholders would lose out.Gold Fields says its plan to inject its international mines into Imagold and take 70 per cent of the new company is a shrewd move, allowing a rerating and access to cheaper capital.Russia’s Norilsk Nickel, Gold Fields biggest shareholder with a 20 per cent stake, is supporting Harmony’s bid to offer 1 275 new Harmony shares for each Gold Fields share.Harmony’s bid is in two parts with the first an offer that expires on November 26 for 34,9 per cent of Gold Fields, just under the regulatory threshold for acquiring a firm.A subsequent offer to acquire remaining shares would follow.-Nampa-Reuters