(Alliance News) - Gold Fields Ltd said on Monday hailed its potential buy of Toronto-based Yamana Gold Inc, as it made the final push to court its own shareholders before they vote on the deal.
In a letter addressed to shareholders on Monday, Gold Fields Chair Yunus Suleman stressed that Yamana represented a "unique" combination of asset quality, jurisdictional profile, extensive portfolio and growth optionality.
Suleman said the company zeroed in on Yamana following an "extensive and continuous review of internal and external opportunities".
"Gold Fields consistently invests to grow the value and quality of our portfolio and has most recently focused on the ongoing delivery of South Deep and the Salares Norte project," the chair said, noting that these assets will drive production growth over the next two to three years.
The company, he wrote, faces systemic challenges of maturing assets and a decline in the quality of new gold discoveries, saying the central focus of the mining group is to replenish the pipeline of "value creation opportunities".
Gold Fields intends to buy Yamana in an all-share offer valued at around USD6.7 billion, or ZAR103.8 billion.
In terms of the proposed acquisition, Yamana shareholders will receive 0.6 of a new Gold Fields share for each Yamana share held, implying a valuation of USD6.7 billion.
Yamana shareholders will vote at its special general meeting on November 21 for the proposed acquisition. Gold Fields will hold its own special general meeting the following day, allowing its shareholders to have a say in the mooted takeover.
"Having regard to the terms and conditions of the transaction, the board is of the opinion that the terms of the transaction are in the interests of Gold Fields and its shareholders and, accordingly, unanimously recommends that all shareholders vote in favour of the transaction resolutions as the directors intend to do in respect of their own shares," Gold Fields said in a circular posted to its shareholders on Monday.
Gold Fields will own 61% of the combined group and Yamana will hold the rest.
The combined entity will be headquartered in Johannesburg with operations across Canada, Australia, South America, Ghana and South Africa.
Gold Fields shares rose 1.0% to ZAR146.28 each in Johannesburg on Monday. Yamana was down 0.6% at 397.50 pence in London.
By Artwell Dlamini; artwelldlamini@alliancenews.com
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