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Yamana Gold Inc on Tuesday endorsed a joint offer from Pan American Silver Corp and Agnico Eagle Ltd, its board recommending that shareholders vote against the Gold Fields Ltd bid that it previously supported.
This past Friday, Pan American and Agnico Eagle made an unsolicited joint offer for Toronto-based Yamana. Yamana and Gold Fields had entered into a definitive agreement for an all-share takeover deal on May 31.
In a statement on Tuesday, Yamana said it had entered into an arrangement agreement with Agnico Eagle and Pan American.
In a dramatic twist, the company said its board now unanimously recommended that its shareholders vote against the Gold Fields offer.
Yamana shareholders will vote on the proposed acquisition at a special general meeting on November 21. Gold Fields will hold its own special general meeting the following day, allowing its shareholders to have a say in the proposed takeover.
In Johannesburg, Gold Fields shares rose by 0.1% to R 154.16 each on Tuesday afternoon. Yamana shed 3.1% to 412.00 pence in London. In the New York pre-market on Tuesday, Yamana was up 0.4% at $4.89. It has a market capitalisation of about $4.60 billion.
Under the new joint bid tabled on Friday, the consortium offered $1.0 billion in cash, plus about 153.5 million shares in Pan American, which is listed on Nasdaq, and some 36.1 million shares in Agnico Eagle, which is on the New York Stock Exchange.
Under the Gold Fields offer, Yamana shareholders would receive 0.6 of a new Gold Fields share for each Yamana share held, implying a valuation of $6.7 billion or R 103.8 billion. If the deal succeeds, Gold Fields shareholders would own 61% of the combined group and Yamana shareholders the rest.
Gold Fields said in a short statement on Tuesday that its investment committee will be convened, and it will provide a further update to shareholders on the transaction.
The Johannesburg-based gold miner indicated on Monday that it would not get involved in a bidding war with Pan American and Agnico Eagle, standing firm behind its existing offer.
It said on Monday its board had unanimously determined that it will not change the terms of its proposed acquisition. It believes its offer remained strategically and financially superior to the joint offer.
Yamana said on Tuesday: "The board has unanimously determined in good faith, after consultation with its outside financial and legal advisors, and upon the unanimous recommendation of the special committee of independent directors of the board, that the Agnico-Pan American transaction is a 'Yamana superior proposal' in accordance with the terms of Gold Fields arrangement agreement."
The Agnico-Pan American agreement will become effective upon the Gold Fields arrangement agreement not being approved by Yamana shareholders at the general meeting, unless Gold Fields elects to terminate the agreement before then.
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