South Africa’s Gold Fields Ltd. has ended its flawed attempt to acquire Toronto-based Yamana Gold Inc., handing victory to Canadian precious metals miners Agnico Eagle Mines Ltd. and Pan American Silver Corp.
In late May, Johannesburg-based Gold Fields proposed buying Yamana for US$6.7-billion in stock, a 42-per-cent premium to Yamana’s market price. The deal was poorly received, with Gold Fields shares losing as much as 40 per cent in the months that followed, and two of its biggest shareholders, VanEck and RWC Partners Ltd. (known as Redwheel), denounced the deal as making no sense strategically.
With almost the entire paper premium being offered by Gold Fields gone, Agnico and Pan American pounced last Friday with a proposal that was 15 per cent higher. On Tuesday, Gold Fields said it was unwilling to top the new offer from the Canadians, putting an end to a takeover saga that gripped the global mining industry for almost six months.
Joe Foster, portfolio manager at VanEck, a major shareholder of Gold Fields, Yamana and Agnico Eagle, did not like the earlier Gold Fields offer for Yamana, calling it a “poorly structured deal” that got a “horrible market reaction.”