Gold Fields, Yamana set down dates for voting on proposed all-share takeover

THE direction of Gold Fields’ bid for Canada’s Yamana Gold will be decided on two days in November after the two firms today set down dates for their respective shareholder meetings.

Yamana shareholders will meet on November 21 which will be followed by a general meeting of Gold Fields shareholders the following day, on November 22. Gold Fields needs 75% of its shareholders to support the deal; while for its part, Yamana Gold needs two-thirds of total shareholder approval.

Gold Fields also said today in an announcement to the JSE that it would publish its circular setting out the details of its all-share bid for Yamana on October 24.

The transaction was first announced on May 31 in which Gold Fields said it would offer 0.6 of its shares for each Yamana share. The transaction was criticised for being too expensive.

In June, the Financial Times quoted Redwheel, which owns 3% in Gold Fields, as saying the South African miner ought to focus instead on the “excellent organic growth options which it already owns”.

“While we acknowledge Gold Fields’ desire to secure long-term production growth, we believe that the takeover of Yamana is both too expensive and not guaranteed to deliver production growth and profitability,” Redwheel said.

However, Gold Fields’ management has held firm on its intentions despite shares in the company initially shedding about a fifth of its value. It did, however, sweeten its offer by promising to pay higher dividends as well as investigating a listing of the firm’s shares in Toronto where Yamana trades.

Gold Fields CEO, Chris Griffith said in August there was “a real likelihood” shareholders would approve the firm’s all-share bid for Yamana Gold. “I think the market is beginning to understand the deal. The spread has come down so we are seeing shareholders coming back,” he said.

If Gold Fields is successful in buying Yamana it will have minimum production of 3.2 million ounces a year with potential to increase to 3.6 million oz/year – large enough to make it the third biggest gold producer globally assuming rivals don’t increase production. Were the deal not to be approved Gold Fields’ production stands to shrink to about two million oz annually from a peak of about 2.8 million oz by 2027.

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