Gold Fields might try to split in two to fend off a R29.8 billion hostile takeover, Bernard Swanepoel, the chief executive of bidder Harmony Gold, said yesterday.
"Management has been telling shareholders that they want to break the company in two," Swanepoel said. "They're looking to try something like an Iamgold part two."
On December 7 Gold Fields shareholders rejected a $2.9 billion (R17.9 billion) plan to buy Canada's Iamgold. Gold Fields would have split, merging its mines outside South Africa with Iamgold's operations in Mali and Ghana to form a company with shares traded in Toronto.
The deal would have killed Harmony's bid.
Advisers were "constantly evaluating various options", said Ian Cockerill, Gold Fields' chief executive. He declined to comment on the speculation.
"Anything we do will have to be an improvement on our current overall plan," he said.
Harmony made its all-stock bid for its bigger rival on October 18. Gold Fields rejected the offer as too low and denied that Swanepoel would be able to cut costs by more than R1 billion a year.
The bid's value has plunged 37 percent since it was made. Harmony was down R1.75 to R45.75 and Gold Fields dropped R1.99 to R67.31 yesterday, while the gold index declined 2.41 percent.
Swanepoel said fund managers in the US and Europe had told him Gold Fields was seeking to win over Norilsk Nickel, which holds 20 percent. Gold Fields might propose combining its international mines with Norilsk's in a company traded in North America, Swanepoel said.
Norilsk's Polyus unit has produced 1.1 million ounces of gold from three Russian mines this year. Norilsk also owns 55 percent of Stillwater Mining, the only US producer of platinum and palladium. Shares of Montana-based Stillwater have plunged 49 percent in the past year.
A deal involving Stillwater "would be great for Norilsk", Swanepoel said. "It could consolidate two dead-end strategies."
The competition tribunal will rule by May 20 on whether the bid can proceed. Harmony, which owns 11.5 percent of Gold Fields, must build the stake to 30 percent before Norilsk will sell its shares.
Norilsk might extend its accord with Harmony to pressure Gold Fields' management, Swanepoel said.