JOHANNESBURG (Dow Jones)--The chief executive of takeover target Gold Fields ( GFI) said late Monday he will advise the company's board to reject a hostile takeover bid by fellow South African gold miner Harmony Gold Mining Co. Ltd. ( HMY.)
In a statement read out by company spokesman Andrew Davidson, Chief Executive Ian Cockerill said Harmony's bid only serves the interests of Harmony and Norilsk Nickel & Mining Metallurgic, Gold Fields' largest shareholder.
"It is not in the interest of Gold Fields other shareholders or South Africa, " he said.
Harmony's bid of 1.275 of its shares for every Gold Fields share was grossly inadequate, the CEO said.
"Harmony's true agenda has not been revealed. It's long on spin and factually inaccurate," said Cockerill in his statement.
Commenting further, Cockerill described the bid as "an opportunistic and desperate attempt by a company in dire straits that has been hemorrhaging cash at the operating level for some time."
Cockerill said a takeover of its assets by Harmony would destroy value in the longer term and said there is "no compelling strategic logic" for Gold Fields shareholders to accept Harmony's offer.
By contrast, he said Gold Fields aim of merging its international assets with those of IAMGold Corp (IAG) provides a platform for aggressive growth and unlimited access to capital markets.
Commenting on Harmony's financial performance, he said the company reported an operating loss of 259 million rand ($1=ZAR6.3700) in the three months to June 30, while Gold Fields achieved an operating profit of ZAR545 million.
Gold Fields CEO Rejects "Desperate" Harmony Takeover Bid
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18-10-2004 13:22
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