(Reuters) -Agnico Eagle Mines Ltd and Pan American Silver Corp swooped in with a bid for Yamana Gold on Friday, a move that could scupper Gold Fields’ planned acquisition of the Canada-listed gold miner.
Under the terms of the near $5 billion cash and stock offer, Yamana shareholders would receive $1.0406 in cash, 0.0376 of an Agnico Share and 0.1598 of a Pan American Share for each share held.
South Africa’s Gold Fields had agreed to take over Yamana for $6.7 billion in an all-stock deal in May, and a shareholder vote was set to take place on Nov. 22.
However, Gold Fields’ U.S.-listed shares had slumped 40% so far this year by Thursday’s close. At those levels, its all-stock takeover of Yamana would have a valuation just north of $4 billion.
Yamana said it has informed Gold Fields the new offer constitutes a “superior proposal”. Gold Fields has five business days to amend its existing offer should it wish to.
Gold Fields said that its offer was “strategically and financially superior” and that it would continue to work towards completion of the deal. Gold Fields shares shot up by 15% on news of the counter-bid, a sign that the market believes the deal could be off.
The biggest question now is whether Gold Fields makes a counteroffer, Unathi Loos, portfolio manager at Ninety One in Cape Town, said. That would, in her view, be a negative.
“Their original [offer] was already at a premium and shareholders would no doubt want to see capital allocation discipline,” she said.
(Reporting by Mrinalika Roy and Helen Reid; Editing by Krishna Chandra Eluri and Louise Heavens)
