Gold Fields won’t raise offer for Yamana Gold after rival bid

According to Mining News Pro - Gold Fields (JSE, NYSE: GFI) has ruled out the possibility of raising its offer for Yamana Gold (TSX: YR)(NYSE: AUY) after two Canadian miners teamed up last week and put an unsolicited $4.8 billion bid on the table.

The cash and stock offer from Agnico Eagle Mines (TSX, NYSE: AEM) and Pan American Silver (TSX, NASDAQ: PAAS) on Friday trumped Gold Fields’ bid, which valued Yamana at around $4.2 billion at Thursday’s close.

“Gold Fields will continue to work towards completion of the transaction on its current terms for the benefit of the shareholders of both companies in accordance with the arrangement agreement,” the company said on Monday.

The South African miner added its decision reflected “commitment to capital discipline” as well as fairness for shareholders in both the company and Yamana.

It also said its offer was “strategically and financially superior” to the deal presented by Pan American and Agnico Eagle.

The statement contradicts what the two Canadian miners said in their joint press release, which stated that Yamana’s board of directors has already accepted their offer as “superior”.

Gold deal of the year
Gold Fields, which offered to buy Yamana in May, sees the proposed takeover as the gold deal of the year. It would create the world’s fourth-largest gold miner, surpassing Agnico Eagle.

The company reiterated that Yamana’s assets would create significant near-term and long-term value for the shareholders of both companies.

The deal would help Gold Fields’ expand in the Americas, particularly in the Southern Hemisphere.

“That’s what the Yamana assets do, they tick all those boxes for us. They bring high quality assets in Canada, Chile and Brazil, with great pipeline projects in both Canada and Argentina in particular,” Griffith said in a presentation.

Walking away from the deal could impact the Johannesburg-based miner’s long-term growth outlook. Gold Fields has already faced investor criticism for the 33.8% premium it offered when its $6.7 billion bid was announced.

Yamana’s website still has a banner on the landing page announcing the Gold Fields’ deal. Should their agreement be terminated, the Toronto-based miner would have to pay a $300 million break fee to Gold Fields.