Tuesday, 7th December 2004 (2426 views)

Gold Fields shareholders have rejected a plan to buy Canada's Iamgold for around $2.9 billion, giving renewed hope to a hostile bid for their company by Harmony Gold Mining - a move that would create the world's largest gold producer.

The Iamgold proposal won support from 48.8 per cent of shareholders at a vote in Johannesburg today, spokesman Willie Jacobsz said.

Harmony's 37.9 billion-rand ($6.6 billion) offer depended on shareholders turning down the deal.

"It vindicates us to the extent that we said there was substantial opposition from Gold Fields shareholders,' Ferdi Dippenaar, Harmony's marketing director, told Bloomberg.

"Hopefully this is an opportunity for the hostility to end.'

OAO GMK Norilsk Nickel, Gold Fields' largest shareholder with 20 per cent, voted against the transaction as did three unidentified institutions, Gold Fields chief executive Ian Cockerill said. Moscow-based Norilsk has pledged to sell its shares to Harmony.

Gold Fields wanted to combine its assets outside South Africa with Iamgold's stakes in Mali and Ghana, forming a company called Gold Fields International, whose shares would trade in Toronto.

Gold Fields aims to reduce its dependence on South Africa, where the strengthening rand has cut profit on sales of metals in dollars.

Harmony is trying to buy Gold Fields to cut costs by firing managers and sharing services. The merged company would run mines in South Africa, Ghana and Australia and produce more gold than Newmont Mining, the No. 1 producer.

 

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