A leading commodities dealmaker from the UK has taken legal action against Barrick Gold, claiming he played a crucial role in the company’s $6 billion merger with Randgold Resources but was ultimately excluded from the deal at the last moment.
Ian Hannam, known for his significant influence in mining mergers and acquisitions, expressed his disappointment in a London High Court hearing, asserting that his firm, H&P Advisory, is owed payment for its considerable efforts in facilitating the merger, which took place in 2018.
H&P is seeking up to $18 million from Barrick Gold, whose partnership with Randgold established it as the largest gold producer in the world at that time. The case, slated to be reviewed over ten days, is shedding light on the typically confidential interactions between corporate leaders and their financial advisors during major mergers.
During the hearing, Hannam stated that the deal, which he had dubbed “British Rail,” would not have been possible without his involvement. He also expressed shock at seeing the name of Wall Street banker Michael Klein’s firm mentioned in the merger announcement, while H&P was not acknowledged. “I never believed we were being pushed out until the announcement,” he remarked.
Barrick Gold’s legal representatives, led by George Spalton KC, firmly denied Hannam’s allegations. They maintained that discussions about a potential merger had been ongoing for several years and contended that there is no written evidence to substantiate H&P’s claims for a fee.
In his testimony, Hannam insisted he was instrumental in uniting two key figures in the mining sector: Mark Bristow, CEO of Randgold, and John Thornton, then head of Barrick, who now serve as CEO and Chair of the merged company, respectively. He also mentioned an agreement in which H&P would receive at least a $10 million fee, asserting they deserved more than Klein’s firm would be compensated.
Barrick’s lawyers countered that the documentation H&P presented to support their claim was internally generated by less senior staff who were not involved in the negotiations.
Hannam, who previously worked at JPMorgan, faced regulatory action in 2012 when he was fined £450,000 for market abuse related to insider information. He later received a favorable ruling from an appeals tribunal, stating that his actions were solely in the interest of his client without any dishonest intentions.
Hannam’s track record includes involvement in several notable mining transactions, notably the public offerings of Billiton, which later merged with BHP, and Xstrata’s acquisition by Glencore, marking one of the largest mergers in mining history.