Investors are worried that South Africa’s Gold Fields is overpaying for Yamana Gold
Gold Fields chief executive officer Chris Griffith says he’s not afraid of losing his job if the company’s proposed acquisition of Canada’s Yamana Gold Inc. is not successful, pointing out that the big South African gold miner has options in the event the deal falls through.
Investors are skeptical of the all-stock deal, which was worth US$6.7-billion when it was announced in late May but has declined significantly in value since then, after an almost 28-per-cent sell-off in shares of Johannesburg-based Gold Fields Inc.
Mr. Griffith said the gold miner is making progress in its attempt to win over skeptical shareholders, saying he has received a lot more positive feedback lately, and that the “probability of success is increasing.” However, when asked if he was confident of getting the required 75-per-cent support from shareholders, he said he didn’t have the data to answer that question.
Mr. Griffith indicated that Gold Fields is unlikely to walk away from the deal, even if there is doubt heading into the shareholder vote in October, because doing so would mean having to pay Yamana a US$450-million break fee.
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