ASA is a decent vehicle, I have some myself. I see the HMY-GFI merger has finally been put out of its misery (for the moment):
UPDATE 2-Court ruling halts Harmony takeover bid early
Fri May 20, 2005 10:48 AM ET
yahoo.reuters.com
(Adds comments from Gold Fields CEO, Harmony, fund manager)
By Eric Onstad
JOHANNESBURG, May 20 (Reuters) - A South African court ruled on Friday that Harmony Gold Mining Co Ltd's (HARJ.J: Quote, Profile, Research) $4.3 billion hostile bid for Gold Fields Ltd (GFIJ.J: Quote, Profile, Research) expired five months ago, leaving Harmony with 11.5 percent of its rival.
Both firms and investors expressed irritation that the battle, which cost over $50 million, had been pointless since December, but Harmony said it now wanted to hammer out a fresh deal with the stake.
"All of the money these guys have spent since December, that's money down the drain," said fund manager Stephen Roelofse of Sanlam Investment Management, which owns 3.4 percent of Gold Fields, the world's fourth biggest gold producer.
Harmony Investor Relations Executive Brenton Saunders denied other media reports that Harmony planned to sell the stake, saying no decision had been made.
It now wanted to conclude a "strategic" deal with another party with an interest in the stake, possibly Gold Fields itself or its biggest shareholder, Russia's Norilsk Nickel (GMKN.RTS: Quote, Profile, Research) .
"We haven't been legally allowed to speak to anyone in the process... with respect to any kind of subsequent or side deals, but now we can go down that road. And clearly those are our preferred alternatives," Saunders added.
A strategic deal could include many things, but a swap of the shares for mining operations was one example, he added.
Harmony was in a tricky situation since an overhang of shares could depress Gold Fields' price, Roelofse said.
"I think it's better to get one buyer for that stake since the market knows they want to get rid of it," he said.
BITTER ON RULING
The judgment, which came shortly before Harmony's all-share bid was due to close at midday, highlighted conflicting takeover regulations in South Africa that officials have already acknowledged need to be reformed.
The court ruled that the Securities Regulation Panel had erred in allowing Harmony to extend its bid, which was launched on October 18, beyond the normal 60-day limit imposed on takeover offers.
Harmony, the world's sixth biggest gold producer, was bitter about the surprise court ruling after spending millions of rand to acquire its rival. "We're highly disillusioned with the process," Saunders said.
Harmony won 11.5 percent of Gold Fields in the first stage of its offer in November.
"It (court ruling) effectively means that the offer will have deemed to have closed on December 18. Anything above the 11.5 percent will not be valid," Saunders said.
Few shares had been tendered since December, however, as investors sought a sweetener to the bid which never emerged and the value of Harmony's offer tumbled.
An industry source with knowledge of the bid said Harmony had increased its stake to less than 12 percent of Gold Fields by Friday morning.
GOLD FIELDS' RELIEF
Gold Fields expressed relief that its seven-month battle to sink the hostile bid had succeeded.
"I'm relieved that it's over... (but) it's a pity that this thing had to go on for five months longer than was necessary," Chief Executive Ian Cockerill told Reuters.
Now that the bid had failed, Gold Fields was no longer restricted from forging other deals and would also seek to improve its relationship with its shareholder Norilsk, he said.
"I would certainly hope that we can build on the existing relationship and take it further, absolutely," Cockerill said.
He said he had been having regular talks with Norilsk, including phone conversations over the past week, but declined to comment on speculation that the firm might offer board seats to Norilsk, which initially threw support behind Harmony's bid.
Norilsk had agreed to tender its 20 percent stake, but the deal was not triggered since Harmony got only 11.5 percent of Gold Fields, not enough shares to gain control.
Norilsk declined to comment on Friday.
Last month, the Gold Fields and Harmony had said total estimated costs linked to the bid were 330 million rand ($51.53 million).
Gold Fields said it had spent 170.4 million rand to defend itself and Harmony said it estimated total costs of 159.1 million rand if it failed to get a majority stake.
Harmony shares, which have lost nearly half their value since the bid was launched, gained 0.6 percent to 43.25 rand by 1330 GMT while Gold Fields fell 0.9 percent at 63.25 rand, against a flat gold mining index . |
