Monday, 10th January 2005 (2882 views)

Gold producer, Gold Fields, is this week expected to set out its terms for a "friendly" take over deal.

The company has been the centre of a $6-billion hostile takeover bid by rival Harmony Gold and, their chief executive is expected to announce a meeting with their rival to discuss terms, reported the Telegraph.

Ian Cockerill, Gold Fields chief executive, is also expected to announce that the current offer by Harmony Gold undervalues the company.

According to the newspaper, the company will be asking its rival to exclude its unprofitable mines from the deal.

"We think about 50 per cent, and it could be as high as 70 per cent, of Harmony's mines are losing money at the current rand gold price," claimed an executive close to Gold Fields.

The rand has had a financial impact on all of South Africa's mining groups, reportedly losing out from paying their costs in rand and receiving payment for their products in dollars.

Harmony began its bid to buy out all of Gold Fields' shares last October. The take-over would create the world's biggest gold production company, which Harmony claims will cut costs through shared infrastructure and services.

 

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