Agnico Eagle Mines (TSX, NYSE: AEM)听and Pan American Silver听(TSX, NASDAQ: PAAS) are buying fellow Canadian miner Yamana Gold听(TSX: YRI), (NYSE: AUY), (LON: AUY)听in a $4.8 billion cash-and-shares transaction.
Toronto-based Yamana it had inked a deal with the two precious metals miners after South Africa鈥檚 Gold Fields听(JSE, NYSE: GFI) waived on Monday its right to match听the听rival bid.
It added that the company鈥檚 board now unanimously recommends shareholders reject the Gold Fields takeover at a vote scheduled for November 21.
Gold Fields responded to Yamana鈥檚 change in recommendation by saying it was disappointed by the outcome. 鈥淲e continue to believe that the transaction was a financially and strategically superior offer for shareholders of both Gold Fields and Yamana,鈥� the company said.
The Johannesburg-based miner added it was terminating its arrangement agreement with Yamana, which will have to pay a $300 million break fee to Gold Fields for walking out of their deal within two business days.
鈥淭he emergence of another bid highlighted the value of [Yamana鈥檚] assets and the need to respond to systemic strategic challenges facing the gold industry,鈥� Yunus Suleman, chair of Gold Fields, said in the statement. 鈥淗owever, we are disciplined in how we assess the value of assets and opportunities, and we were not prepared to be drawn into a bidding war which would have been value destructive for our shareholders.鈥澨�听
Gold Fields鈥� initial all-stock offer valued the target at $5bn (C$6.8bn), but a decline of the miner鈥檚 share price driven by investor disappointment at the deal and weaker gold prices brought the deal value down to about $4.2bn as of Thursday鈥檚 close.
Agnico and Pan American unveiled the rival stock and cash offer听on Friday, which contemplates splitting Yamana鈥檚 assets in Latin America and Canada between them.
The Gold Fields-Yamana transaction would have created the听world鈥檚 fourth-largest gold miner, surpassing Agnico Eagle.听
With the acquisition of Yamana Gold, Pan American will strengthen its position as a top precious metals producer in Latin America, while Agnico Eagle would consolidate its ownership of one of the world鈥檚 biggest gold mines, the Canadian Malartic in Quebec.