Since announcing the Gold Fields buy-in of Yamana Gold, convincing the company’s shareholders to back its takeover offer for Canada’s Yamana Gold was still a “work in progress”, according to Chief Executive Chris Griffith.
The South Africa headquartered miner, with assets in Australia, Africa and South America, announced plans in May to acquire Yamana in an all-share deal valuing the Canada-listed miner at $6.7 billion on May 31, 2022.
However, shares of Gold Fields plunged after news of the proposed takeover. Last month, the miner promised higher dividends and a Toronto Stock Exchange (TSX) listing to sweeten its takeover offer.
The market has started to understand the strategy and the timing of the deal, but is still miffed with the premium the company offered to pay, Griffith told reporters at a mining conference in Kalgoorlie, Australia on Tuesday, August 2, 2022.
“We are trying to get them to see the massive upside that exists in this deal. So work in progress is probably the best way to describe it,” he said when asked if investors and shareholders were on board with the deal.
Transaction Closure Missed
Previously, the transaction was expected to close in the second half of 2022 subject to and following the satisfaction of the conditions precedent to the transaction.
Gold Fields shareholders will vote on the deal in the second week of October 2022. Griffith said the company has held a couple of road shows in recent weeks to “educate” shareholders.
Redwheel, one of the 10 biggest investors in Gold Fields, publicly told the miner to cancel the takeover, which it described as an expensive error with no guarantee of growth and profitability.
Gold Fields’ shares tumbled 25 per cent in the first few days after the details of the deal and the premium it was paying emerged but the shares have made a comeback since, Griffith said.
When asked if the deal terms would be changed if there’s pushback from shareholders, Griffith said: “The deal structure has been locked in. We don’t foresee that we will change the deal structure. But I do say that never say never.”
The total valuation for Yamana at $6.7 billion, represents a premium of 33.8 per cent to the 10-day volume-Weighted Average Price of Yamana’s Shares of $5.20.
Based on the terms of the transaction, it is anticipated that Gold Fields’s Shareholders and Yamana Shareholders own approximately 61 per cent and 39 per cent of the Combined Group, respectively.
Meanwhile, the acquisition of Yamana by Gold Fields significantly strengthens the ability of the combined company to deliver on Gold Fields’ three strategic pillars: maximizing asset potential; advancing ESG commitment; and growing the value and quality of its asset portfolio.
According to Chris Griffith, the Combined Group is expected to maintain Gold Fields presence in all regions while continuing to honour commitments to stakeholders.
Gold Fields believes that this transaction offers employees and communities more opportunities in the long-term given its track record of ongoing investment in the regions in which it operates.
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