Harmony loses latest round in hostile takeover bid

South African mining group Harmony has lost the latest round in a hostile takeover of rival Gold Fields when a court rejected an urgent attempt to appeal against a ruling frustrating its bid to create the world’s largest gold producer.

The Supreme Court of Appeal rejected a bid by Harmony on Tuesday urgently to appeal against a ruling by the Competition Appeal Court that had put a freeze on its voting rights over the Gold Fields shares it has acquired.

Harmony wanted to use its newly-acquired 10.8-percent holding of shares in Gold Fields to vote down a proposed takeover by Gold Fields of Toronto-based IAMGold which Gold Fields is putting to shareholders on December 7.

«The Supreme Court of Appeal said it was not going to make a ruling now,» Harmony spokesperson Patrick Lawlor said on Wednesday.

"The Judge President of the Court has taken the view that it is not necessary to convene an urgent court to hear the matter.

«But, if the shareholder meeting happens and the votes would have made a difference (in the IAMGold transaction), then we can apply for an interdict to have the decision turned around.»

Harmony, the world’s sixth-largest gold producer, launched on October 18 a multi-billion-dollar bid for Gold Fields, the number four gold miner, with the support of Russia’s Norilsk Nickel, a major Gold Fields shareholder.

Harmony offered 1.275 of its own shares for each Gold Fields share, a 29 percent premium from the share value at closing of October 14.

It managed to obtain 10.8 percent of Gold Fields shares under the terms of an early-settlement offer that expired at midday on Friday. It also enjoys support from Norilisk, which owns just more than 20 percent of Gold Fields shares.

The received shares however were not enough to own a controlling 34.9-percent stake in Gold Fields. Harmony is hoping to obtain that in the second phase of its takeover bid.

Meanwhile Gold Fields shareholders will vote next week on a proposal to reverse-list its non-southern African Development Community assets into IAMGold of Canada. — AFP

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