The dust had hardly settled on Tuesday this week before the squabbling started.
Had the vote of Gold Fields’s shareholders truly represented the majority view? Did the vote, which rejected the group’s plans to merge its assets outside South Africa with those of Canada’s IAMGold, represent a motion of no confidence in the group’s directors? Was it a proxy vote in favour of the hostile bid by Harmony Gold?
An 11th-hour vote switch by insurance group Sanlam tilted the IAMGold vote against Gold Fields’s directors. And this opened the door for Harmony to proceed with its all-paper bid for Gold Fields — a bid that would have been abandoned had the IAMGold transaction taken place.
Why did Sanlam change its mind? It is not saying. But Harmony CE Bernard Swanepoel is a Sanlam director, and Harmony’s chairperson, the oligarch Patrice Motsepe, is Sanlam’s deputy chairperson. Did they influence the Sanlam board? Was there a visceral rejection by the Afrikaner-dominated Sanlam of Gold Fields’s rooinekke and ethnic solidarity with the Afrikaners at the helm of Harmony?
Politically unfashionable suggestions perhaps, but they come from analysts trying to fathom Sanlam’s corporate mind.
The fact is that when it came down to the wire it was enough that the anti-IAMGold movement led by Harmony was supported by Gold Fields’s largest single shareholder, the Russian mining group Norilsk Nickel, by Sanlam and by the Public Investment Commission.
Had the vote gone the other way, Harmony would almost certainly have made good its threat to go to court, no matter what the cost and no matter what “destruction of value”. But so what?
The second stage of Harmony’s bid was attempting to swap its own shares for the outstanding 88,2% of Gold Fields that remain after the 11,8% acceptances of the early-bird offer. Norilsk has irrevocably agreed to deliver its 20% shareholding. And if the votes opposing the IAMGold transaction truly represented a proxy endorsement of Harmony’s bid, Harmony CE Bernard Swanepoel can count on making life pretty uncomfortable for Gold Fields’s CE Ian Cockerill and his board colleagues.
After the rejection of the IAMGold transaction, Cockerill put a brave face on things. He suggested diplomatically that the time might be ripe for discussions. A triumphal Swanepoel was having none of that. He scents victory. In a phone-in debate with Cockerill on Moneyweb Radio he was uncompromising.
He was in no mood to concede an increase in the current offer of 1,275 Harmony shares for each Gold Fields share. And judging by his previous record, there will be little future for Cockerill and his colleagues in a merged group.
Sure, Motsepe was appointed chairperson of Harmony after merging his African Rainbow Minerals (ARM) with the company. But he seems to be a figurehead and has played no public role in a fight between the two white chief executives of Harmony and GF.
It is not altogether certain that the ARM/Harmony merger would have occurred without legislation requiring 26% black ownership of the mining industry by the next decade. The ARM mines Motsepe had earlier acquired from the likes of AngloGold are now largely closed. Harmony could not keep them going profitably.
And Rick Menell, who merged his Avgold, which at least had the Target gold mine as its major asset, has been given the largely honorary posi- tion of Harmony’s deputy chairperson.
Swanepoel calls the shots at Harmony —there is no room for anyone else. And Cockerill will be well aware of this as he puts together a post-IAMGold strategy. — Â