UK court orders Barrick to pay Hannam $2 Million for the Randgold merger

The High Court of London ruled that Barrick Gold Canada must pay British dealmaker Ian Hannam’s firm $2 Million plus expenses for the work he did on the acquisition by Randgold Resources.

Hannam, a former top rainmaker at JPMorgan, was nicknamed "the king of mining" because of his track record in brokering deals for the resources sector. This includes the merger which created BHP in 2001 and the merger between Glencore and Xstrata in 2012.

Hannam & Partners, his advisory firm, has sued Barrick over an agreement he claims was reached just before Barrick's acquisition of Randgold in 2018.

Hannam & Partners reported that it had been promised a minimum amount of $10 million. The figure would increase if the transaction was valued at more than $10 billion.

Hannam was refused $18 million after Barrick and Randgold reached a deal worth $18 billion.

Randgold's attorneys said that there was no evidence in writing of the alleged contract and Hannam & Partners were not owed any payment.

In a written decision, Judge Simon Gleeson stated that "no agreement to provide investment advice services has ever been made".

He added that the claimant (Hannam & Partners)'s early work in promoting this transaction conferred a value to both Randgold, and Barrick.

Both Barrick and Randgold acknowledged this and intended to pay the claimant a sum of money in relation to the value they believed they received. They estimated that this was an amount of $ 2 million.

Gleeson stated that Hannam & Partners is entitled to $2,000,000 plus expenses.

Hannam & Partners CEO Neil Passmore called the decision "a seminal judgement for the investment banking sector with a substantial fee award for work done on a handshake despite there being no written contract".

Barrick claimed victory as well, claiming that Hannam & Partners was awarded "the amount Randgold had proposed to pay Hannam & Partners in September 2018 in return for its limited role in the transaction". (Reporting and editing by Mark Potter.)

(source: Reuters)