Yamana Gold Stock Soars After Gold Fields Takeover to $6.7 Billion
Updated at 10:31 a.m. EST
Gold Yamana (AUY) – Get the report from Yamana Gold Inc. (Canada) shares jumped on Tuesday after the Canada-based gold producer agreed to a $6.7 billion takeover by South Africa’s Gold Fields (GFI) – Get the Gold Fields Limited U.S. Deposit Stock Report.
Gold Fields will pay 0.6 of its U.S. custodian shares for every Yamana share, the companies said Tuesday, with the all-stock deal valuing the Toronto-based group at a 34% premium to its 10-day average. Gold Fields investors will own 61% of the combined group, which includes the Canadian Malartic mine – the largest in the country – with Yamana shareholders owning the remaining 39%.
The deal, the largest in the Africa and Middle East region in more than a decade, will allow both Gold Fields and Yamana to cut costs amid the fastest inflation in forty years and a slump in global demand, which is partly affected by the Covid lockdown in China and a weaker than expected Indian wedding season.
“The combination of Yamana and Gold Fields creates a globally diversified, world-class company with regional relevance in leading rules-based mining jurisdictions, backed by low-cost, long-term mining service life,” said Yamana Executive Chairman Peter Marrone. the entity will be well positioned to create long-term value through its increased size, management strength and improved profile in capital markets. »
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“Yamana and Gold Fields also have complementary corporate cultures and values with an ESG-focused operating model with a strong focus on supporting host communities and environmental stewardship,” a- he added. “We believe Yamana’s shareholders’ stake in the Combined Group reflects the fair value of the contribution made by each company.”
Shares of Yamana, which will be delisted from North American stock exchanges once the deal closes later this year, were up 8.22% from their Friday close at the start of trading in New York to change course. hands at $5.60 each.
Gold Fields shares, meanwhile, fell 20.66% to $9.68 apiece.
Spot gold prices have risen only around 1.1% so far this year and were last seen at $1,848.30 an ounce, after hitting a multi-year high of $2,502.14 in early March.
The SPDR Gold Trust ETF (GLD) – Get SPDR Gold Stock ETF Reportthe world’s largest, fell 0.2% in premarket trading on Tuesday to $172.51 apiece, a move that would cut its year-to-date lead to around 2.6%.
The US dollar index, which tracks the greenback against a basket of six global currencies, rose 0.16% to 101.829, extending its year-to-date gain to around 6%.