No Quick Sale of Cons Gold Units Seen
Lord Hanson, the tycoon who is about to clinch the biggest deal in British corporate history, is expected to move slowly to restructure mining group Consolidated Gold Fields PLC, industry analysts said Wednesday.
After 10 days of hard bargaining, Hanson PLC on Tuesday agreed to pay $5.5 billion (3.5 billion pounds) for Cons Gold, founded more than a century ago by British empire builder Cecil Rhodes. Both companies’ shareholders are expected to endorse the agreement.
“It is sad to see the loss of independence of a great British company such as Gold Fields,” Rudolph Agnew, its chairman, said in a statement accepting the bid.
Cons Gold fought off a similar offer by Minerals & Resources Corp. in May after a lengthy legal battle. Minorco is the overseas investment arm of South African financier Harry Oppenheimer’s gold and diamonds empire.
Hanson PLC, one of Britain’s 10 largest firms, is a multinational conglomerate with interests ranging from Eveready batteries and Smith-Corona typewriters to Jacuzzi whirlpool baths and Ground Round restaurants.
“It was a very good deal for Hanson,” said one broker at London brokerage Kleinwort Benson. “He’s not paying any more cash, and Cons Gold’s shareholders should be reasonably happy.”
Hanson said he expected discussions to begin shortly on Cons Gold’s future structure and policies, but analysts did not expect him to move quickly.
“Hanson won’t be a forced seller,” said analyst Andy Quinn at brokerage James Capel. “He might not want to sell the gold assets now but rather wait for the next upswing in price.”
Alan Richards at Barclays de Zoete Wedd said he did not foresee a quick sale of Cons Gold assets.
“Hanson has a track record of holding onto these things for several years before selling them,” he said.
Hanson is expected to retain ARC, Cons Gold’s building materials subsidiary, which extracts 45 million tons of hard rock every year from British quarries.
ARC, seen as a valuable gem in the Cons Gold treasure chest, would dovetail nicely with Hanson’s building products businesses. It also has strong earnings potential.
Analysts also said Hanson could keep Cons Gold’s Australian associate Renison Goldfields Consolidated Ltd. Renison’s AMC division is one of the world’s largest suppliers of high-grade feed stock for titanium dioxide pigment production.
“Hanson’s SCM Chemicals is a major titanium dioxide producer,” said analyst Liz Dhillon at broker W. I. Carr. “It is a possible retention.”
But Dhillon cited Minorco as a possible buyer of Gold Fields Mining Corp. in the United States.
And Hanson almost certainly would seek a buyer for Cons Gold’s 38% interest in Gold Fields of South Africa Ltd. for political reasons, analysts said.
There is a question mark over Newmont Mining Corp., Cons Gold’s 49%-owned U.S. gold producer.
Lord Hanson, often pictured escorting Hollywood stars such as Audrey Hepburn in the 1950s, has a formidable reputation for winning takeover battles and is outspoken for his right-wing political views.
