FSB Takes Close Look at Gold Fields 'Offer'
By Charlotte Mathews
13 Apr 2007 at 10:31 AM GMT-04:00
resourceinvestor.com
JOHANNESBURG (Business Day) -- Gold Fields [NYSE:GFI] executives were locked in meetings with South Africa’s regulators yesterday after the shares soared on Wednesday on reports of a bid for the group.
Bloomberg reported yesterday that the documents on the bid were leaked to it by a Gold Fields executive. The report sent Gold Fields shares up as much as 11% on Wednesday. Yesterday, they closed 1.4% lower at R140 (US$19.46).
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Bloomberg and Reuters reported the Financial Services Board (FSB) would investigate a possible contravention of the section of the Securities Services Act that prohibits the publication of false and misleading information. A key issue would be whether those behind the release of information profited by trading in Gold Fields shares.
“We haven’t started the investigation yet, but it seems rather unlikely that this person or this entity exists,” said Gerhard Van Deventer of the FSB. “That’s what the investigation is about - to really understand whether there is anything behind it. If it turns out to be false we will do an investigation into false or misleading statements made by whoever is responsible. If the information turns out to be true we will probably also do an investigation into improper selective disclosure of this information.”
Gold Fields head of corporate affairs Willie Jacobsz said Gold Fields requested a meeting with the JSE, which took place yesterday afternoon.
The JSE indicated it would refer the matter to the FSB for investigation. “Gold Fields supports this fully,” Jacobsz said.
Meanwhile, the existence of Edward Pastorini, the U.S. financier reported to be preparing the bid for Gold Fields, was confirmed by two separate sources, including Pastorini himself.
This seems to confound some market theories that the whole report was a hoax, but various industry sources continued to voice suspicion about the motives behind Pastorini’s proposals.
Harmony Gold [NYSE:HMY] confirmed it had received several e-mails from Pastorini earlier this month, including one inquiring whether Harmony would be interested in buying any of Gold Fields’ mines and proposing that, if it was, Pastorini would come to South Africa for a meeting. Harmony told Pastorini it was not interested at this stage.
Harmony CE Bernard Swanepoel said his staff clearly believed the bid was a hoax as no serious bidder would go about things in this way. He said he had watched Gold Fields share price soaring on Wednesday with interest, but said Harmony did not sell a single one of its Gold Fields shares because Swanepoel had a suspicion this would turn out to be “a messy business”.
Harmony made a failed hostile bid for Gold Fields almost three years ago and disposed of the shares it acquired during the bid, but acquired more Gold Fields shares earlier this year in a swap for its stake in Western Areas.
Asked whether AngloGold Ashanti had been approached to join a bid for Gold Fields, an AngloGold spokesman said only “the company does not comment on market speculation”. Newmont Mining director of media relations Omar Jabara said Newmont was not familiar with Pastorini “and his efforts”.
An e-mail to Theodore Roxford, the now-retired partner in a mergers and acquisitions firm called Hollingsworth, Rothwell & Roxford, elicited a prompt response confirming that Pastorini was his cousin, who had been invited to join the firm in 2003 but declined because he preferred to remain private. Pastorini, contacted by his cousin, e-mailed Business Day and confirmed he was not Roxford - a suspicion apparently voiced by Bloomberg.
Roxford attracted some media attention in the U.S. in 2003 after Hollingsworth, Rothwell & Roxford made three public bids: for Zapata Corporation, Edgetech and Sony.
Roxford rejected Bloomberg’s statement that the firm had been involved in “phony takeover bids”. He said on all the deals the partners were involved in they contacted potential partners, financiers and industry players to put together a legitimate bid.
Pastorini also sent Business Day his three-page proposal document sent to mining companies outlining a strategy for taking over Gold Fields. It invites companies to participate and choose whatever of Gold Fields assets they were interested in acquiring.
Roxford said he noted in Bloomberg’s reports that the document was not leaked by Pastorini.
If any impropriety is proven by the FSB, the fact that they may be in another country will not absolve them from any prosecution, according to Van Deventer.
“We do have agreements with foreign jurisdictions and with our colleagues at the SEC in the US and elsewhere - so that’s not the end of the world,” Van Deventer said.
“We’ve asked our colleagues before to assist with our investigations in the past, and we’ve assisted them. If necessary we will ask for assistance from foreign jurisdictions to get behind this.”
With Business Day Classic. |
