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A prominent British commodities dealmaker is suing Barrick Gold over claims he engineered its $6bn tie-up with Randgold Resources only to be “pushed out” of the deal at the last minute.
Ian Hannam, who earned a reputation as the “king of mining M&A” for his role in a raft of big-name deals, told the High Court in London that he found it “very upsetting” that his H&P Advisory boutique was not paid for its “extensive” work on arranging the 2018 merger.
H&P is demanding up to $18mn from Canada’s Barrick Gold, whose combination with London-listed Randgold created what was at the time the world’s biggest gold miner.
The case, which is being heard over 10 days, shines a light on the normally secret deliberations between corporate executives and banking advisers who work on large-scale M&A.
Hannam, a former special forces soldier, told the court that the deal, for which he had coined the code name British Rail, “would not have happened without me”.
He also said he had been “shocked” to see Wall Street dealmaker Michael Klein’s firm named in the release that announced the merger but no mention of H&P. “I never believed we were being pushed out until the announcement,” he said.
Lawyers for Barrick Gold, led by George Spalton KC, said the company “categorically denied” the claims. In written arguments, they said Randgold and Barrick had “already been discussing a potential merger for years” and there was in any event “no written evidence of any such alleged agreement” with H&P for the payment of fees.
In his witness statement, Hannam said he played a central role bringing together two of the biggest personalities in the mining industry in Randgold’s chief executive Mark Bristow and Barrick’s John Thornton. They now are the respective chief executive and chair of the enlarged group.
Hannam also said he “shook hands on” an agreement that H&P would receive a fee of at least $10mn and “in any event we should not be paid less than Michael Klein was going to be paid”.
“We had done much more than he had to put the deal together,” Hannam added.
Barrick Gold’s lawyers said the “only documents H&P relied on in support of the alleged agreement” were “internal” to the claimant and “created by junior employees who were not present” at the relevant time.
Hannam, a former JPMorgan banker, was fined £450,000 by the then Financial Services Authority in 2012 after it found he engaged in market abuse by passing inside information to a foreign government official.
He has said he was pleased an appeals tribunal found he was acting “only in the interests of my client and without any dishonest or ulterior motive”.
Hannam was heavily involved in a host of high-profile mining deals, including the UK initial public offerings of Billiton, which subsequently merged with BHP to form the world’s most valuable natural resources group, and Xstrata, whose takeover by Glencore was the most valuable merger in mining history.
