come on Ron, say the words "I was wrong".
this just in
Key quote:
>Franco-Nevada is the leading precious metals royalty
>company and the fifth largest gold company in the
>world by market capitalization. The company has high
>margin profit producing properties and royalty
>interests in the world's major gold camps plus a
>total royalty portfolio spanning five million acres
>in six countries. Franco-Nevada has a proven track
>record of growing profits, is completely unhedged
>and remains cash rich and debt-free.
-----Original Message-----
From: GATA Committee <GATAComm@aol.com>
To: gata@egroups.com <gata@egroups.com>
Date: Tuesday, June 13, 2000 9:07 AM
Subject: [GATA] Gold Fields and Franco-Nevada to merge
>11a EDT Tuesday, June 13, 2000
>
>Dear Friend of GATA and Gold:
>
>Below is the press release announcing the merger of
>Gold Fields and Franco-Nevada. The people at these
>companies believe in gold's historic purposes and
>have been acting from that belief, and so I think
>that this couldn't be better for the gold cause.
>
>CHRIS POWELL, Secretary/Treasurer
>Gold Anti-Trust Action Committee Inc.
>
>* * *
>
>Franco-Nevada and Gold Fields to Merge,
>Creating One of The World's Largest
>and Strongest Gold Companies
>
>No. 1 balance sheet in the industry
>No. 2 in reserves and resources
>No. 3 in annual production,
>No. 4 in market capitalization
>
>TORONTO and JOHANNESBURG, June 13 /CNW-PRN/ -
>Toronto-based Franco-Nevada Mining Corporation
>(TSE:FN - news) and Johannesburg-based Gold Fields
>Limited (JSE:GFI and NASDAQ:GOLD) announced today
>that their boards of directors have unanimously
>agreed to unite the two companies through a merger
>of equals.
>
>Under the terms of the merger agreement,
>shareholders of Gold Fields will receive 0.35 shares
>of Franco-Nevada for each Gold Fields common share
>resulting in the issue of approximately 159 million
>Franco-Nevada common shares. Based on recent share
>prices, the combined company would be valued at US
>$3.7 billion (ZAR 25.8 billion).
>
>This combination will create one of the world's
>largest and strongest gold companies with a common
>philosophy, belief in the future of gold, and
>commitment to maximizing shareholder value. It will
>have a number of unique rankings in the gold
>industry:
>
>
>- First in terms of balance sheet strength, with
>virtually no debt and
>over US $700 million (ZAR 4.9 billion) in cash and
>marketable securities.
>
>- First in terms of lowest break even costs and
>among the lowest total
>costs per ounce.
>
>- Second in gold equivalent reserves (75 million
>ounces) and resources
>(150 million ounces).
>
>- Third in annual gold production (4.4 million
>ounces).
>
>- Fourth in market capitalization (US $3.7 billion).
>
>
>The new company, to be named Gold Fields
>International, will enjoy revenues of US $1.26
>billion (ZAR 8.8 billion), EBITDA of US $316 million
>(ZAR 2.2 billion), net income of US $154 million
>(ZAR 1.1 billion) and cash flow of US $277 million
>(ZAR 1.9 billion). These are pro forma annualized
>figures to March 2000, excluding exceptional items
>and Canadian GAAP adjustments.
>
>Seymour Schulich, co-founder, Chairman and Co-CEO of
>Franco-Nevada, said, `This is a significant step in
>our strategic growth as a company and in the ongoing
>pursuit of value for our shareholders. We believe in
>gold and this transaction will give our new company
>the greatest leverage to gold possible. The new
>company will also be particularly well placed to
>lead further consolidation in the gold industry.
>Franco-Nevada co-founder, President and Co- CEO
>Pierre Lassonde and I have entered into multi-year
>employment contracts as Co-Chairmen with the new
>company. Our goal is to develop the leading global
>gold company based one-third in North America, one-
>third in South Africa and one-third in the rest of
>the world.`
>
>Chris Thompson, Chairman and CEO of Gold Fields and
>President and CEO designate of the new company said,
>`This is another step in bringing to fruition the
>strategy we embarked on with the formation of Gold
>Fields Limited, just two years ago, in globalizing
>the company and creating value for our shareholders.
>This merger is a leap for Gold Fields into the
>international arena that could not be achieved
>through organic growth alone. It provides our
>existing shareholders with an offshore component to
>their investment, much improved liquidity, and
>participation in the growth and success of one of
>the largest and strongest gold companies in the
>world. It will ensure long-term growth in our
>assets, and the sustainability of our consolidating
>industry. In short, this transaction is good for our
>company, our shareholders, our employees and our
>country.`
>
>Mr. Thompson added `It brings together complementary
>management strengths and assets that provide a solid
>foundation and direction for growth. It also
>provides the new company with the highest leverage
>to the gold price. My colleagues and I are delighted
>to endorse this transaction which will create a
>leading diversified gold producer and enormous value
>for our shareholders.`
>
>The new company will continue to operate in a
>financially prudent manner. It will remain the only
>virtually unhedged senior gold producer in the
>world. The balance sheet will remain unlevered
>except for long-term corporate bonds and specific
>project debt and it is intended that the company
>will pay out 50% of earnings in yearly dividends.
>Most important of all, the company's low cost
>structure will offer excellent leverage to the gold
>price. We believe any increase in the price of gold
>will produce significant increases in each of cash
>flow, earnings and share price.
>
>Following the merger, each company's shareholders
>will own 50% of Gold Fields International. The head
>office will be located in Toronto and the executive
>office in Johannesburg. The board of directors will
>include 4 appointees of Franco-Nevada, 4 from Gold
>Fields and 4 management personnel. The experienced
>management team, one of the youngest in the
>industry, will be drawn from both companies. Mr.
>Schulich and Mr. Lassonde will serve as Co- Chairmen
>with a particular focus on acquisition growth. Mr.
>Thompson will serve as President and CEO. Mr. Ian
>Cockerill and Mr. Nick Holland, COO and CFO,
>respectively, of Gold Fields Limited, and Mr. Craig
>Haase, Chief Legal Officer for Franco-Nevada, will
>all hold the same positions in the new company. The
>company will have a primary listing on the Toronto
>Stock Exchange and will apply to have its common
>shares listed on the New York, Johannesburg, Paris,
>Brussels and Swiss Stock Exchanges.
>
>The transaction, which will be immediately accretive
>to Franco-Nevada's earnings and cash flow, is
>expected to be accounted for as a pooling of
>interests under Canadian accounting rules. The
>merger and its terms and conditions will be subject
>to the receipt of various approvals including,
>specifically, from the South African Ministry of
>Finance: the South African Reserve Bank; and the
>South African Securities Regulations Panel with
>regard, inter alia, to the proposed capital Scheme
>of Arrangement and related circular; the regulatory
>authorities in Canada; the Johannesburg Stock
>Exchange; 75 % of the voting shareholders of Gold
>Fields in respect of the Scheme of Arrangement; the
>South African Courts; and confirmatory due diligence
>by June 30. Franco-Nevada shareholders will vote on
>the name change and revised board structure.
>
>It is anticipated that information will be mailed to
>Gold Fields' shareholders in July. The Gold Fields
>and Franco-Nevada meetings are expected to be held
>in August with an effective date to occur in
>September. Gold Fields has received irrevocable
>undertakings to vote in favour of the merger in
>respect of 11% of its outstanding shares.
>
>The merger agreement provides for a US $70 million
>(ZAR 488 million) break fee and a 5% option on each
>company's stock payable only in the event that
>either of the board of directors withdraw their
>endorsement of the Scheme of Arrangement or if a
>superior proposal is consummated within twelve
>months.
>
>National Bank Financial Inc. and Merrill Lynch & Co.
>have been engaged by Franco-Nevada to review the
>merger from a financial point of view and to assist
>Franco-Nevada's board of directors in their
>deliberations. Deutsche Bank AG and HSBC Group have
>been engaged by Gold Fields to review the merger
>from a financial point of view for Gold Fields and
>to provide a fairness opinion to the board of
>directors of Gold Fields as part of the approval
>process for the Scheme of Arrangement. All the
>investment advisors will cooperate in facilitating a
>positive vote on the proposed Scheme of Arrangement
>from Gold Fields' shareholders.
>
>Franco-Nevada is the leading precious metals royalty
>company and the fifth largest gold company in the
>world by market capitalization. The company has high
>margin profit producing properties and royalty
>interests in the world's major gold camps plus a
>total royalty portfolio spanning five million acres
>in six countries. Franco-Nevada has a proven track
>record of growing profits, is completely unhedged
>and remains cash rich and debt-free.
>
>Gold Fields is the second largest gold producer in
>South Africa and one of the largest in the world. It
>has the second largest gold reserves and resources
>in the industry and annual production in excess of 4
>million ounces. Its South African operations include
>the highest-grade mine in South Africa and the mine
>with South Africa's highest productivities.
>
>Current listings and symbols:
>
>FRANCO-NEVADA: TSE: FN
>
>GOLD FIELDS: JSE: GFI, NASDAQ: GOLD, BRUSSELS,
>PARIS and Swiss Stock Exchange
>
>-END-
>
>
>
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