A hearing to decide whether Harmony Gold may go ahead with a hostile takeover of rival mining house Gold Fields is scheduled for next week, but a last minute court application could stall the inquiry.
The Competition Tribunal said the hearing would start on Tuesday, but Gold Fields has applied for an interdict to prevent any implementation of Harmony’s offer pending a hearing to have the deal nullified.
”The tribunal will be hearing this matter between 3-6 May at 9am,” the tribunal said in a statement.
Harmony, the sixth largest gold producer in the world, launched the takeover bid in October last year.
In terms of the deal it will give 1,275 new shares for each Gold Fields share. The deal has valued the entire shared capital of Gold Fields at R52,9-billion.
Gold Fields claims the offer lapsed on December 18, 2004 and is incapable of revival.
”Gold Fields claims that the Harmony offer to acquire all of the Gold Fields shares and to merge the two entities lapsed on 18 December 2004 and is incapable of revival,” the company said in its quarterly results’ statement on Thursday.
Gold Fields brought a further application to be heard on May 3, asking the court to interdict any implementation of the Harmony offer pending the hearing to have the offer nullified.
Harmony already owns about 11,5% of Gold Fields and produces around 3,6-million ounces of gold a year.
Gold Fields produces more than 4,3-million ounces and employs around 48 000 people.
Should the merger go ahead, it will create the world’s leading gold mining company based on production, reserves and resources.
The Competition Commission has recommended the tribunal approve the merger, subject to a moratorium for two years on retrenchments.
It has also recommended that there be no retrenchments below the level of corporate management and supervisory positions and that the merged entity may retrench up to a maximum of 1 500 from the shift boss level up to chief executive level.
”This tribunal ruling will hopefully allow Gold Fields shareholders to finally have a say in how and who runs Gold Fields through having the Harmony bid go unconditional,” Harmony chief executive Bernard Swanepoel said in a recent company statement.
Harmony has accused Gold Fields of orchestrating an unnecessary delay in the merger, saying should the deal go ahead it would end a period of ”extensive delay, interference and frustration orchestrated by Gold Fields”.
Gold Fields reported a loss of R86-million for the quarter ending March 31 on Thursday, but said this was primarily a result of the R170-million cost of defending against the Harmony bid.
The company has said that Harmony’s offer is grossly undervalued and that its management model is flawed.
Ian Cockerill, the chief executive of Gold Fields, said on Thursday that it was a challenging time for the South African gold mining industry.
”I am delighted with the way all of our employees have responded magnificently to the twin challenges of the difficult operating environment and the continuing saga of the hostile Harmony offer,” he said. – Sapa