JSE-listed Gold Fields has decided to walk from a potentially disastrous bidding war for Canadian mining house Yamana Gold.
This after Yamana Gold, which owns and operates gold, silver and copper mines in Canada, Chile, Brazil and Argentina on Tuesday opted to accept a rival bid for its assets, despite having had an agreement in place with Gold Fields.
Gold Fields, led by Chris Griffith, had offered 0.6 of its shares for each Yamana share, implying a valuation of R103.8-billion. The deal, if concluded, would have seen Gold Fields’ shareholders own 61% of the combined group and Yamana shareholders the rest.
However, a rival joint bid by Agnico-Eagle and Pan American Silver emerged on Friday, opening the door for a bidding war. The joint bid offered $1-billion (R17.7-billion) in cash, plus about 153.5-million shares in Pan American, which is listed on Nasdaq. It further offered 36.1-million shares in Agnico Eagle, which is listed on New York Stock Exchange.
The management of Gold Fields then moved swiftly to allay fears that it will readjust its offer to outbid the offer put on the table by Agnico-Eagle and Pan American Silver.
“As a result of Yamana entering into an arrangement agreement with Pan American Silver and Agnico Eagle Mines Limited and announcing a change in recommendation, Gold Fields has terminated the arrangement agreement in respect of the transaction,” Gold Fields said in a note to shareholders.
“In accordance with the terms of the arrangement agreement, Yamana is required to pay Gold Fields a termination fee in the amount of $300-million within two business days from the date hereof.
“Gold Fields is disappointed by this outcome, and continues to believe that the transaction was a financially and strategically superior offer for shareholders of both Gold Fields and Yamana.
“Nonetheless, following the Yamana’s change in recommendation, Gold Fields believes the most disciplined and prudent course of action to maximise Gold Fields’ shareholder value is to terminate the arrangement agreement. Gold Fields and its shareholders will now benefit from the termination fee.”
Gold Fields has nine operating mines in Australia, Peru, South Africa and west Africa, including the Asanko and one project in Chile.
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