Gold Fields(GFI) takeover? Breakout on $95mil NYSE volume
Gold Fields is largely Ghanaian in addition to its South African assets; merger with Iamgold would make it also Malian. The following story may explain the price/volume explosion.
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Gold Fields shrugs off talk of takeover
Oct 15 2004 07:18:12:000AM John Fraser and John Helmer Business Day 1st Edition
GOLD Fields yesterday insisted it had detected no unusual trading in its shares as rumours were revived that Norilsk Nickel of Russia was planning a takeover of the South African gold producer.
Analysts said they did not expect Norilsk would be satisfied with the 20% of Gold Fields the Russian company bought from Anglo American earlier this year.
But as neither Gold Fields nor Norilsk could confirm the rumour , uncertainty persisted over the future of the South African gold producer.
"We cannot speculate on rumours," said a spokesman for Gold Fields.
Industry sources said had Norilsk purchased any new shares in Gold Fields, this would have had to be notified to the markets.
Gold Fields shareholders will vote in December on a plan to reverse-list the company's nonSouthern African Development Community assets into Iamgold of Canada, in a deal that will give the Gold Fields parent company a 70% stake in the new international entity. It is to be re named Gold Fields International.
There have been rumours that Norilsk is unhappy with this strategy, but the Russian company would be unlikely to block the deal unless it boosted its stake significantly in Gold Fields to a level that would require a mandatory offer to minorities.
Gold Fields and Norilsk have said in the past that they hoped to work together, and were looking at potential synergies between their gold operations.
A further complication adding to the current uncertainty is the additional speculation that Norilsk is working with a South African partner to take over Gold Fields.
Harmony Gold has been mentioned.
The company's director Ferdi Dippenaar would not comment on this rumour yesterday.
But analysts believe that were such a teaming up to take place, it could result in Harmony taking over Gold fields' South African assets, with Norilsk acquiring the other assets, giving it a platform from which to list outside Russia.
Another scenario would give Norilsk control of Harmony, with Harmony in turn controlling Gold Fields. Such an arrangement would require approval from SA's competition authorities, but might win their blessing because it would involve a significant injection of foreign capital into SA's economy, said analysts.
Investment relations spokesman for Norilsk Nickel, Dmitri Usanov, yesterday refused to answer questions.
A source close to Polyus, the Norilsk Nickel gold-mining unit, said its strategy was not to acquire a larger stake in Gold Fields.
Instead, it was aiming to acquire additional Russian gold deposits, and to seek a major North American gold-mining company with which to list in either New York or Toronto.
Other sources close to Norilsk Nickel and Interros, the holding company controlled by Vladimir Potanin, Norilsk Nickel's principal shareholder, claimed Polyus was not part of the decision-making process that led to the acquisition of the 20% Gold Fields stake in March.
The sources claimed this move was initiated by Leonid Rozhetskin, the company's financial strategist. They claimed there had been a subsequent fallingout between Rozhetskin and Mikhail Prokhorov, Norilsk Nickel's CEO and Potanin's shareholding partner.
The details are hazy, but the sources believed Rozhetskin might leave Norilsk Nickel soon.
The sources doubted that Rozhetskin's strategy for sharebuying, leading to an eventual takeover of Gold Fields, had been agreed to by either Potanin or Prokhorov at this stage.
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