Fund manager denounces Gold Fields’ planned US$6.7-billion acquisition of Yamana – by Niall McGee (Globe and Mail – October 27, 2022)

The top gold fund manager with the firm that owns the largest amount of shares in South Africa’s Gold Fields Ltd. GFI-N and Toronto’s Yamana Gold Inc. is denouncing the proposed merger of the two companies as Gold Fields struggles to win shareholder support for the deal.

Joe Foster, portfolio manager with New-York-based Van Eck said in an interview the deal is “poorly structured,” received a “horrible market reaction” and he cannot comprehend the rationale for the multibillion-dollar transaction from the viewpoint of either the acquirer or the target.

Johannesburg-based Gold Fields in May said it intended to acquire Yamana for a 42-per-cent premium to its stock market value in a share swap worth US$6.7-billion. The company said buying Yamana would help address long-term growth challenges in Gold Fields itself.

But Mr. Foster said there had been no indication Gold Fields was facing a growth problem and, in fact, the opposite seemed to be true. “It really was unexpected, and the market didn’t, and maybe still doesn’t, understand the strategy behind the deal,” he said.

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