Boost for Gold Fields in Harmony battle

South Africa's Gold Fields won a legal victory yesterday in its battle to fight off a $6.7bn hostile takeover bid from Harmony Gold on the closing day of a partial offer by Harmony.

South Africa's Gold Fields won a legal victory yesterday in its battle to fight off a $6.7bn hostile takeover bid from Harmony Gold on the closing day of a partial offer by Harmony.

The Competition Appeal Court ruled that Harmony can acquire Gold Fields shares, but cannot use them to vote down a merger agreed by Gold Fields with Canada's Iamgold, a court spokeswoman said.

Analysts said the ruling boosts the chances that the Iamgold deal will be approved by shareholders on 7 December and may discourage investors who may have backed Harmony's bid. One analyst said: "This ruling comes as perfect timing in favour of Gold Fields. Anybody who thought they were going to tender their shares today, they're going to think twice."

Results of the tender are due to be announced next week.

The fate of the Gold Fields-Iamgold deal is crucial for Harmony, which has made its full takeover of Gold Fields dependent on the Iamgold deal being voted down. Gold Fields lost a separate appeal yesterday when a Supreme Court judge rejected its challenge of a previous High Court ruling, the two companies said. In the High Court case, it demanded Harmony's takeover bid be declared unlawful. The first ruling marks the only legal victory for Gold Fields in its battle against Harmony's bid.

Harmony wanted to use shares tendered in an initial partial offer, which closed at noon, to vote against Gold Fields' agreed $2.1bn union of its offshore assets with Iamgold.

Harmony plans to appeal against the ruling but still believes the Iamgold deal will be voted down even without the Harmony votes.

Gold Fields said that it was a victory for shareholder democracy. Iamgold's chief, Joe Conway, welcomed the news but said much would depend on how many Gold Fields shares had been tendered to Harmony. (Reuters)