The chairperson of Gold Fields and Harmony Gold, Chris Thompson and Patrice Motsepe, held informal talks on Wednesday, Gold Fields and Harmony spokespersons said on Thursday.
Both companies indicated that the talks had been at the initiative of the other company’s chairperson, with neither claiming that they had initiated the talks.
“The talks were at the request of Chris Thompson,” a Harmony spokesperson said.
“Patrice [Motsepe] requested the meeting with Chris Thompson. Gold Fields was in listening mode. Nothing new emerged out of the meeting. They were talks about talks,” Gold Fields spokesperson Willie Jacobsz said.
The talks follow the rejection of the proposed merger of Gold Fields’ international mining assets with those of Iamgold, which was voted down by Gold Fields shareholders on Tuesday.
However, Jacobsz said that Gold Fields wasn’t willing to enter into talks unless Harmony met three conditions.
Firstly, should Harmony dramatically increase its offer to Gold Fields shareholders. Harmony is currently offering 1,275 Harmony shares for every Gold Fields share held.
Gold Fields Chief Executive Officer Ian Cockerill has said that the minimum offer ratio that Harmony should offer Gold Fields’ shareholders on a net present value basis is 1,73 Harmony shares for every Gold Fields share held.
Sanlam Investment Management, which has a 3,5% stake in Gold Fields, has said it is seeking an offer ratio of 1,700 Harmony shares. Old Mutual Asset Managers, which has a 5,8% stake in Gold Fields, has said it would only start considering Harmony’s offer from a ratio of 1,500.
“Harmony’s subsequent offer remains on the table and there is no plan to change it right now,” a Harmony spokesperson said.
The subsequent offer expires on February 4, 2005.
The second condition for talks between Harmony and Gold Fields, Jacobsz said, was that Harmony present a comprehensive, audited statement of its reserves.
A third condition was that Harmony allow a full due diligence of its entire asset portfolio, he added.
“Unless these conditions are met, Gold Fields is not prepared to enter into discussions,” Jacobsz said.
In addition, Gold Fields isn’t willing to consider a full merger of Harmony’s mining assets with those of Gold Fields’ assets, he added.
Earlier in the week, Cockerill said that Gold Fields and Harmony remained two distinct types of companies with only about four or five of Harmony’s assets out of a total of 30 plus assets, being of Gold Fields’ quality.
“Harmony needs to solve its own problems and shouldn’t look to solve them through a merger with Gold Fields,” Jacobsz said.
No follow up talks are on the cards, Harmony and Gold Fields spokespersons said.
The process of Harmony’s bid is likely to be friendlier than previously, the Harmony spokesperson said, as the Gold Fields board cannot proceed without Gold Fields shareholder support, with Harmony and Norilsk Nickel holding a significant block of Gold Fields shares.
Harmony has an 11,8% stake in Gold Fields and Norilsk Nickel has a 20,03% stake in Gold Fields, with Norilsk Nickel having pledged to tender its stake into the Harmony subsequent offer. – I-Net Bridge