Griffith draws comfort from investors ahead of October’s Yamana takeover vote

Chris Griffith, CEO, Vedanta Base Metals

GOLD Fields CEO, Chris Griffith said he drew comfort ahead of an important vote on the firm’s proposed takeover of Yamana Gold next month because its top investors had not sold their shares in the company.

Commenting at the Denver Gold Show, Griffith told Bloomberg News: “There hasn’t been a major exodus of our top shareholders”.

“We have seen some shareholders sell on a bit but others increase. But mostly our top 10 shareholders have remained fairly constant – that does give us a sense of comfort around our shareholders supporting the deal.”

Griffith’s bullishness echoes comments made during a presentation of the firm’s interim results in August when he told analysts there was “a real likelihood” of the deal being supported. “I think the market is beginning to understand the deal. The spread has come down so we are seeing shareholders coming back,” he said at the time.

Gold Fields counts South Africa’s Public Investment Corporation and BlackRock among its biggest shareholders, said Bloomberg News.

Gold Fields’ offer of 0.6 of its shares for each Yamana share was criticised for being expensive and unnecessary even though group production is due to decline from about 2.7 million ounces to 2.1 million oz by the end of the decade.

For it to fly, Gold Fields needs 75% of its shareholders to support the deal; while for its part, Yamana Gold needs just two-thirds of total shareholder approval.

Assuming Gold Fields is successful in buying Yamana it will have minimum production of 3.2 million oz with potential to increase to 3.6 million oz – large enough to make it the third biggest gold producer globally assuming rivals don’t increase production.

Shareholders will be asked to vote on the transaction towards the end of October with completion expected in November. This is slightly later than first planned by Gold Fields as Yamana was conducting an independent valuation.