© Reuters. FILE PHOTO: A visitor speaks to a representative of Agnico Eagle Mines Ltd at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada, March 1, 2020. REUTERS/Chris Helgren
By Helen Reid
(Reuters) -Yamana Gold Inc backed a $4.8 billion takeover bid from Agnico Eagle (NYSE:) and Pan American Silver (NASDAQ:) Corp on Tuesday which trumped an offer from South Africa’s Gold Fields (NYSE:), paving the way to an all-Canadian deal.
Yamana’s board now unanimously recommends shareholders reject the Gold Fields bid at a vote on Nov. 21, the company said on Tuesday, a day after Gold Fields’ decision not to match the Agnico-Pan American cash-and-shares offer.
Tuesday’s news ends a fraught few months for Gold Fields executives who battled to convince investors of the merits of the takeover deal announced in May.
The cash component in the Agnico Eagle and Pan American offer gave their bid an edge, analysts said.
Gold Fields said in a statement it would convene its investment committee and provide a further update following that meeting.
The all-shares offer from South Africa-headquartered Gold Fields valued Yamana at $6.7 billion in May, but the suitor’s shares slumped after the deal was announced, denting the valuation.
At Thursday’s close the Gold Fields offer was worth a little more than $4 billion.
Under the terms of their initial agreement, Yamana will have to pay Gold Fields $300 million for breaking off the deal.
Gold Fields’ Johannesburg-listed shares barely moved on the news, indicating the market had already priced in the deal’s collapse. Gold Fields shares are down around 19% from the day before the Yamana takeover deal was announced.
Under Agnico Eagle and Pan American’s joint offer, Yamana shareholders will receive $1.0406 in cash, 0.0376 of an Agnico share and 0.1598 of a Pan American share for each share held.
Agnico has been on a deal-making streak, having acquired Kirkland Lake Gold (NYSE:) for $11 billion last year. The Yamana deal would see Agnico gaining full control of Canada’s biggest gold mine Canadian Malartic, which it owns jointly with Yamana.
Pan American would take over Yamana’s four remaining mines: Minera Florida and El Penon in Chile, Cerro Moro in Argentina and Jacobina in Brazil.
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