Harmony Gold Mining’s hostile takeover bid for Gold Fields was approved by South Africa’s Competition Tribunal.
Previous conditions set by the Competition Commission say that Harmony may retrench up to 1500 Gold Fields employees from the level of shift boss and up. Tribunal has now ruled that the number of employees Harmony may retrench at the merged entity as a result of the merger has been reduced from 1500 to 1000. In addition, the Tribunal also included “contract workers” in its definition of employees. These conditions are effective for 2 years.
Gold Fields CEO, Ian Cockerill said, “These conditions will make it impossible for Harmony to extract its exaggerated claims of cost-savings from Gold Fields’ operations. The market’s valuation of the spread between the respective share prices has already spoken to the fundamental value differential between the two companies. We urge Gold Fields’ shareholders to continue to protect value and reject Harmony.”
Gold Fields contends that Harmony, by its own admission, during the course of argument to the Tribunal on 9 May 2005, stated that, “If the number of employees and contractors who may be retrenched by Harmony was cut by a third to 1000, we would be considerably hampered.”
Cockerill, added, “We are disappointed that the Competition Tribunal did not stop this bid in its entirety. The proposed merger will have significant negative implications for our employees, suppliers and mine communities. By approving this merger, the Tribunal has forced Gold Fields’ employees to bear the brunt of Harmony’s bid. As an independent entity, Gold Fields does not need to retrench any of its employees. On these grounds and in the interests of job preservation, Gold Fields intends to appeal the clearance the Tribunal has issued today.”
According to a press release, the Competition Appeal Court (CAC) dismissed Harmony’s application for leave to appeal against the judgement granted by the CAC on the 26th November 2004, with costs. The CAC’s interdict of Harmony voting any of its shares in Gold Fields until final determination by the competition authorities of the merger application therefore stands and Harmony may not vote such shares as it may have acquired in Gold Fields until the CAC has finally determined Gold Fields’ appeal.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
