Harmony still has its eyes on its bigger rival

Gold Fields is the subject of a $6.25bn (�3.2bn) hostile takeover bid from rival Harmony and had hoped to find security in a deal with Iamgold.

Gold Fields needed approval of 50% of shareholders plus one vote, but only 48.2% of shareholders voted in favour of the tie-up.

Shares in Harmony fell as much as 9% on the vote news, before recovering.

A Harmony-Gold Fields merger would create the world's largest gold producer.

Harmony's all-share offer for its bigger rival is now valued at about $6.5bn, down from its $8.1bn offer in October.

'Press on'

The shareholder vote is the latest blow to Gold Fields, which last month saw an American court dismiss its objection to the Harmony bid, which it claimed violated US law.

Harmony, the sixth-biggest global gold producer, had said it would halt its bid efforts if the shareholder vote had supported Gold Fields.

"Whilst it is disappointing... we respect the outcome and we will continue to press on," Gold Fields chief executive Ian Cockerill said after the vote which, if approved, would have combined its non-African operations with Iamgold.

But Mr Cockerill insisted shareholders should not tender their shares to Harmony.

"A vote against Iamgold is not a vote for Harmony," he said.

'No confidence'

However, Harmony has now urged Gold Fields to throw in the towel and stop fighting the takeover.

In a statement it said the failure of the Iamgold move was a "vote of no confidence" in management at Gold Fields.

"Gold Fields shareholders have now spoken. With this behind us, we now look forward to engaging with Gold Fields' management to agree the terms of a recommended merger of our two companies," said Harmony chief executive Bernard Swanepoel.