Yamana Gold Inc. executives and board members are in line for more than US$100-million in cash payments for their shares and severance packages if the proposed acquisition of the Canadian gold miner by South Africa’s Gold Fields Ltd. succeeds.
The figure is based on disclosures by Toronto-based Yamana in a proxy circular to shareholders released in advance of its shareholder vote on the deal on Nov. 21. Yamana declined to comment on the payouts.
Johannesburg-based Gold Fields in May reached a friendly agreement to acquire Yamana for a 42-per-cent premium to its market price in an all-stock deal worth US$6.7-billion. Gold Fields said combining the two precious metals companies will result in synergies of US$40-million a year through greater supply chain efficiencies and savings on general and administrative expenses.
Josh Wolfson, analyst with RBC Dominion Securities, wrote in a note to clients the proposed compensation payouts to Yamana’s people, in combination with added transactions costs Yamana and Gold Fields are both paying, will wipe out three years’ worth of the promised synergies.
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