Gold Fields: Harmony's Hostile Offer Should be Abandoned
January 11 2005 - 10:07AM
PR Newswire (US)
Gold Fields: Harmony's Hostile Offer Should be Abandoned
JOHANNESBURG, South Africa, January 11 /PRNewswire-FirstCall/ --
The Board of Directors of Gold Fields Limited (GFI: JSE and NYSE)
wishes to reiterate its position regarding the unsolicited hostile
offer from Harmony Gold Mining Company Limited. The Board is
convinced that Gold Fields' shareholders share its view that
Harmony's hostile offer has little merit, as is evidenced by the
fact that only 11.5% of Gold Fields' shareholders accepted
Harmony's Early Settlement Offer, and, in order to stop the ongoing
value destruction for shareholders of both companies, should be
abandoned. The Board of Gold Fields remains committed to maximising
value for all of Gold Fields' shareholders. The Board believes that
the Harmony offer does not represent a fair value for Gold Fields;
takes no account of the high quality of Gold Fields' asset base;
does not reflect the benefits that successful international
diversification has brought to Gold Fields' shareholders; and does
not reflect the troubled financial and operational condition of
Harmony, nor the positive operating trend that Gold Fields is
experiencing. Shareholders are advised that the Board of Gold
Fields continues to oppose Harmony's hostile offer vigorously, as
the Board believes: 1) The hostile offer grossly undervalues Gold
Fields; consists of only Harmony's over-valued shares with no cash
element; and offers no control premium to Gold Fields'
shareholders; 2) Harmony's management model, the so-called "Harmony
Way", is flawed and unsuited for the challenges presented by Gold
Fields' complex, long-life and deep level South African mining
operations; 3) Harmony does not have the vision, management depth,
or skills and capabilities to manage a global mining company, as
they have effectively demonstrated through their poor track record
of international expansion over the past decade; 4) Harmony's
financial position is increasingly troubled, as is evidenced by its
interest costs exceeding the cash flow generated by its operations.
The Gold Fields Board believes that this is seriously impairing
Harmony's balance sheet and will threaten the viability of any
combined entity. At the current rand gold price nearly half of
Harmony's production is making operating losses; 5) Despite
Harmony's aggressive marketing and reporting practices its business
model has failed both in South Africa and internationally. The
latest Harmony assertion that CONOPS is the panacea that will save
Harmony, is now being exposed with the breakdown over the Christmas
period of CONOPS at the Free State operations, potentially
resulting in significant lost production; and 6) An independent
Gold Fields offers shareholders a solid and transparent investment
vehicle with more exciting growth prospects than the combination
proposed by Harmony. The Board recommends that Gold Fields'
shareholders and ADR holders should continue to reject the Harmony
offer, should not tender their shares or ADRs, and should continue
to reap the benefits of a well managed, performance focussed,
internationally diversified South African champion - Gold Fields.
Possible Alternative Transactions Following the discussions held in
Moscow late in December 2004, Gold Fields and Harmony have agreed
to engage in discussions with a view to exploring possible
alternative transactions to the current Harmony offer. At this
stage no viable alternatives have been identified. Ian Cockerill,
Chief Executive Officer of Gold Fields, said, "Gold Fields will, in
good faith and in the interests of its shareholders, continue to
engage in the discussions with Harmony while, simultaneously,
pursuing a number of parallel yet independent initiatives to create
value enhancing options for all shareholders." "To be acceptable
any alternative transaction with Harmony will have to be executed
at fair value; carried out on the basis of full due diligence; and
deal with Harmony's loss making and marginal assets and impaired
balance sheet". "Shareholders are cautioned that discussions with
Harmony are at an early stage and are exploratory in nature. There
can be no assurance that a mutually acceptable alternative
transaction will be found". "While this process is underway I urge
shareholders to continue to reject Harmony's derisory offer as it
significantly undervalues Gold Fields." In the United States, Gold
Fields Limited ("Gold Fields") has filed a
Solicitation/Recommendation Statement with the Securities and
Exchange Commission (the "SEC") on Schedule 14D-9 and holders of
the Gold Fields Ordinary Shares and American Depositary Shares are
advised to read it as it contains important information. Copies of
the Schedule 14D-9 and other related documents filed by Gold Fields
are available free of charge on the SEC's website at
http://www.sec.gov/. Any documents filed by Harmony Gold Mining
Company Limited, including any registration statement on Form F-4
(including any prospectus contained therein) and related exchange
offer materials as well as its Tender Offer Statement on Schedule
TO, will also be available free of charge on the SEC's website. The
directors of Gold Fields accept responsibility for the information
contained in this document. To the best of their knowledge and
belief (having taken all reasonable care to ensure that such is the
case) the information contained in this document is in accordance
with the facts and does not omit anything likely to affect the
import of such information. Copies of this document are not being
made available, and must not be mailed, forwarded, transmitted or
otherwise distributed or sent in or into Australia, Canada, Japan,
the Republic of Ireland or any other jurisdiction in which it is
illegal to make this document available and persons receiving this
document (including custodians, nominees and trustees) must not
distribute, forward, mail, transmit or send it in or into or from
Australia, Canada, Japan, the Republic of Ireland or any such other
jurisdiction. This document contains "forward-looking statements"
with respect to Gold Fields' financial condition, results of
operations, business strategies, operating efficiencies,
competitive position, growth opportunities for existing services,
plans and objectives of management, markets for stock and other
matters. Statements in this document that are not historical facts
are "forward-looking statements". These forward-looking statements,
including, among others, those relating to the future business
prospects, revenues and income of Gold Fields, wherever they may
occur in this presentation, are necessarily estimates reflecting
the best judgment of the senior management of Gold Fields and
involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the
forward-looking statements. As a consequence, these forward-looking
statements should be considered in light of various important
factors, including those set forth materials filed with or
furnished to the SEC from time to time, including Gold Fields' most
recent Annual Report on Form 20-F. Important factors that could
cause actual results to differ materially from estimates or
projections contained in the forward-looking statements include,
without limitation: overall economic and business conditions in
South Africa, Ghana, Australia and elsewhere; the ability to
achieve anticipated efficiencies and other cost savings in
connection with past and future acquisitions; the success of
exploration and development activities; decreases in the market
price of gold; the occurrence of hazards associated with
underground and surface gold mining; the occurrence of labor
disruptions; availability, terms and deployment of capital; changes
in relevant government regulations, particularly environmental
regulations and potential new legislation affecting mining and
mineral rights; fluctuations in exchange rates, currency
devaluations and other macroeconomic monetary policies; and
political instability in South Africa, Ghana and regionally. Gold
Fields undertakes no obligation to update publicly or release any
revisions to these forward-looking statements to reflect events or
circumstances after the date of this document or to reflect the
occurrence of unanticipated events. Information included in this
document relating to Harmony and its business has been derived
solely from publicly available sources. While Gold Fields has
included information in this document regarding Harmony that is
known to Gold Fields based on publicly available information, Gold
Fields has not had access to non-public information regarding
Harmony and could not use such information for the purpose of
preparing this document. Although Gold Fields is not aware of
anything that would indicate that statements relating to Harmony
contained in this document are inaccurate or incomplete, Gold
Fields is not in a position to verify information concerning
Harmony. Gold Fields and its directors and officers are not aware
of any errors in such information. Subject to the foregoing and to
the maximum extent permitted by law, Gold Fields and its directors
and officers disclaim all liability for information concerning
Harmony included in this document. DATASOURCE: Gold Fields Limited
CONTACT: Enquires: South Africa, Willie Jacobsz, Tel +27-11644-2460
Fax +27-11484-0639 North America, Cheryl A Martin, Tel
+1-303796-8683 Fax +1-303796-8293
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