Iamgold stock falls on Gold Fields deal rumors
Fri Oct 15, 2004 12:17 PM ET
VANCOUVER, British Columbia, Oct 15 (Reuters) - Shares in Iamgold Corp. (IMG.TO: Quote, Profile, Research) tumbled 9 percent early on Friday on rumors that its planned merger with the offshore assets of South Africa's Gold Fields Ltd. (GFIJ.J: Quote, Profile, Research) could be scuppered by a disgruntled Gold Fields shareholder.
"There is concern that Norilsk may seek to buy up more of Gold Fields and squash the Gold Fields-Iamgold deal," a Toronto-based gold analyst said.
Iamgold's stock slid as low as C$9.17 on the Toronto Stock Exchange but by late morning had recovered to C$9.75, a loss of 30 Canadian cents.
Internet mining publication Mineweb quoted unnamed sources as saying that Russia's Norilsk Nickel (GMKN.RTS: Quote, Profile, Research) was rumored to have increased its stake in Gold Fields, the world's fourth biggest gold producer, to 30 percent from the 20 percent it bought earlier this year.
Gold Fields and Iamgold shareholders are set to vote in December on their tie-up, which needs the blessing of a majority of each companies' investors. North American gold analysts have applauded the deal.
Since the Iamgold-Gold Fields deal was unveiled in August, media in Russia and South Africa have speculated that Norilsk may want to block the transaction as it intrudes on its plans to become a large international gold producer with Gold Fields.
Neither Iamgold nor Gold Fields could immediately be reached for comment. Norilsk's investor relations head, Dmitri Usanov ,said: "The official position of our company is that we do not comment on any market rumors which appear regularly."
Mineweb quoted Gold Fields spokesman Willie Jacobsz as saying that he had heard rumors that Norilsk had upped its stake but that he cold not comment further. He said Gold Fields had not seen "anything unusual" in its recent share trading volumes.
(Additional reporting by Eric Onstad in Johannesburg and Aleksandras Budrys in Moscow)
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