South African mining giant Gold Fields lost a high court bid on Thursday to halt a hostile takeover by rival Harmony Gold, which is seeking to create the world's biggest gold producer. Gold Fields, the world's fourth largest gold producer, had argued that the Harmony offer was illegal because it was not accompanied by a registered prospectus in line with provisions of the South African Companies Act.
"The application was dismissed with costs," wrote Judge Lewis Goldblatt in his ruling. Harmony, the world's sixth largest gold producer, launched on October 18 an 8.1-billion-dollar (6.4-billion-euro) bid for Gold Fields with the support of Russia's Norilsk Nickel, a major Gold Fields shareholder. Harmony is offering 1.275 of its own shares for each Gold Fields share.
Gold Fields shrugged off the high court decision, with a company spokesman saying that "the fundamentals have not changed."
"Harmony's hostile coercisive two-stage offer substantially undervalues Gold Fields. It offers only over-valued Harmony paper, no cash and an insufficient premium - Gold Fields shareholders should protect their value and reject the offer," he said. It was the second defeat this week for Gold Fields in its campaign to block the take-over.
On Monday, the Securities Regulation Panel rejected Gold Fields' arguments that Harmony Gold had unlawfully colluded with Norilsk.
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