Ptaskmaster: That is indeed a question?!
The problem is compounded by the fact that the "suitors" involved are traditional competitors -- possibly even enemies.
There are two ways of looking at the answer:
(1) Will Anglogold and Goldfields physically split the mine? I don't know if anyone can answer this --- yet.
(2) More importantly, is there value for shareholders in the "new" shares compared with the Driefontein shares? This is somewhat simpler.
(a) How does the value of Goldfields compare with Dries? The main Goldfields holdings are Kloof and Beatrix. In my opinion, Kloof is comparable with Dries but not Beatrix. Nevertheless, since the merger, Goldfields has fallen considerably and is now extremely cheap. If the basis of valuations are the current market prices then I wouldn't moan.
(b) AngloGold, on the other hand, is up around 50% from the low which Vaal Reefs (the vehicle) achieved prior to the merger. In my opinion, however, most of the principal AngloGold holdings (Vaal Reefs, Western Deeps, Elands, Joel and Freegold --- all stripped of their low grade portions) are at least "as good as" Dries. And AngloGold, of course, is now a "glamour stock", being listed on the NYSE. So, this seems good value too. Its current dividend yield is also higher than that of Dries.
In the meanwhile, Dries has fallen considerably and, at its present price, should be an excellent buy even if there was no merger .
I am not aware of the actual basis of the final share offer. If I remember correctly, AngloGold owns about 35% of Dries and Goldfields 55%. If you know the actual basis of the offer, please advise.
Apropos the mining scene in SAf, there are now two main groups --- AngloGold and Goldfields (Gencor) and three smaller groups --- Avgold, Harmony and Randgold/JCI. There are also some new "black empowerment" companies which have taken over many of the marginal shafts at a song. These are, as yet, unlisted. |
