Gold Fields CEO disappointed as share price falls after Yamana takeover announcement but vows to plow on – by Niall McGee (Globe and Mail – June 1, 2022)

https://www.theglobeandmail.com/

Chris Griffith, the chief executive officer of Gold Fields Ltd., is fielding questions from shareholders concerned that the South African gold major is overpaying for Yamana Inc., but he is nonetheless determined to push ahead on the deal, insisting the price on the table is fair.

Earlier this week, Johannesburg-based Gold Fields announced it intends to acquire Toronto-based Yamana for US$6.7-billion in an all-stock transaction. Yamana shareholders are set to receive 0.6 of a Gold Fields share for each of their Yamana shares, a premium of 42 per cent over the Friday close on the New York Stock Exchange.

That paper premium largely vanished as soon as the shares started trading on Tuesday, with Gold Field’s stock plummeting by 23 per cent, and Yamana’s share price only rising by 3.7 per cent. Gold Field investors fretted about the prospect of their shareholdings being diluted, the lack of cost savings associated with the deal, and the steep premium that is being offered.

While Gold Fields’ shares recovered some lost ground on Wednesday, its stock is still 21 per cent below where it was before the deal was announced. “The scale of the drop in the share price was disappointing and unexpected,” said Mr. Griffith in an interview.

For the rest of this article: https://www.theglobeandmail.com/business/article-gold-fields-ceo-disappointed-share-prices-fall-after-yamana-takeover/