Gold Fields sees investors backing Yamana deal

A Gold Fields’s top executive said disquiet over the South African miner’s $7 billion (about R124 billion) offer to buy Canada’s Yamana Gold hasn’t resulted in an exodus among its top shareholders.

The top Gold Fields investors are sticking around even after some shareholders initially expressed concerns that the Johannesburg-based company was overpaying to buy Yamana, chief executive Chris Griffith said on Tuesday in an interview.

He previously acknowledged that some investors initially balked at the 34% premium Gold Fields initially offered of the Toronto-based miner along with the subsequent share dilution.

“There hasn’t been a major exodus of our top shareholders,” Griffith said at the Denver Gold Forum. “We’ve seen some shareholders sell on a bit, but others increase. But mostly our top 10 shareholders have remained fairly constant – that gives us a sense of comfort around our shareholders supporting the deal.”

Gold Fields offered 0.6 of a share for each Yamana share in its proposal in May, and in July the company announced a more generous dividend policy to convince investors to support the deal.

The deal values Yamana’s stock at C$6.01 (about R79.63), representing a 6.7% premium to Tuesday’s closing price, according to data compiled by Bloomberg.

Gold Fields counts SA’s Public Investment Corporation and BlackRock Inc among its biggest shareholders. The gold producer needs at least 75% of its investors to back the takeover of Yamana, which has assets in Canada, Argentina, Chile and Brazil.

The deal is key to its expansion in the Americas after shifting focus from SA, where producers are struggling with the geological challenges of operating some of the world’s deepest mines.