No news was good news for South Africa's Harmony Gold Mining Company (NYSE: HMY ) today. Over at rival and takeover target Gold Fields Limited (NYSE: GFI ) , a shareholder vote was held to endorse the latter company's merger with Canada's Iamgold (AMEX: IAG ) . That vote ended in a defeat for the merger, which Gold Fields has now confirmed will not proceed.
The vote was a squeaker, as such things are usually judged -- but the numbers actually looked a lot like the results of the recent U.S. presidential election. "Against" played the part of President Bush, garnering 51.44% of the total; "for" played Sen. John Kerry, getting 48.23%; and the corporate Naderites (there's a mixed metaphor for you) abstained with 0.33%.
Note that those numbers reflect the votes of those shares that were "present and voting," rather than of all shares outstanding. Pursuant to court order, Harmony was forbidden from voting the total 11.8% stake it had acquired in the first part of its two-stage tender offer. According to Bloomberg, Norilsk Nickel (NQB: NILSY) voted its 20% stake against the Iamgold merger (no surprise there; Norilsk has opposed that merger from the get-go). Three other institutional investors joined Norilsk in voting against the merger, including one turncoat former supporter of the deal. That was enough to kill it.
Harmony practically cackled with glee over the result. Just compare the two headlines, reporting the same lack of news, from the two warring sides. Gold Fields put out the laconic "Gold Fields Shareholders do not Approve IAMGold Transaction." Harmony gloated: "Overwhelming Rejection of The Proposed IAMGold Transaction." That, too, was to be expected, as Harmony strenuously opposed its target merging with Iamgold, going so far as to say that if the Iamgold merger was approved, Harmony would call off its own takeover attempt, take its nuggets, and go home.
But now, it looks like this tale will continue, and probably much to investors' chagrin. While Harmony's management may be pleased with the outcome of today's vote, judging from the market's reaction, no one came out a real winner today. At the time of this writing, Gold Fields' share price had already dropped 1%, Harmony's 2.5%, and Iamgold's 6%.
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