UPDATE 2-Gold Fields sweetens Yamana deal to win over investors

Published: 2022-07-11 tag: deals

* CEO says consolidation of gold industry only starting (Adds CEO quotes)

A small toy figure and gold imitation are seen in front of the Gold Fields logo in this illustration taken November 19, 2021. REUTERS/Dado Ruvic/Illustration

July 11 (Reuters) - South Africa's Gold Fields (GFIJ.J) on Monday promised higher dividends and a Toronto Stock Exchange (TSX) listing to sweeten its proposed takeover of Canada's Yamana Gold (YRI.TO) .

The miner announced plans to acquire Yamana in an all-share deal valuing the Canada-listed miner at $6.7 billion on May 31, but market reaction was largely negative and Gold Fields shares plunged 20% on the day.

Gold Fields CEO Chris Griffith on Monday told reporters he was "greatly encouraged" by "constructive" discussions with shareholders over the proposed deal, which the company said would create the world's fourth-largest gold producer by output.

The company, which has a primary listing on the Johannesburg Stock Exchange, said it would declare an interim and final dividend of up to 45% of normalised earnings each year, up from a previous payout range of 25-35%.

"It's really to give comfort to shareholders that there is going to be cash returned to shareholders. It's sending a message about our confidence in the deal," Griffith said.

He added that consolidation in the gold industry is just beginning and now is the time to snap up Yamana for its quality assets.

Redwheel, one of the 10 biggest investors in Gold Fields, last month publicly told the miner to cancel the takeover, which it described as an expensive error with no guarantee of growth and profitability.

"We believe the Yamana acquisition delivers on our strategy to grow the value and quality of our portfolio, by creating a winning combination of excellent assets with complementary operational strengths," Griffith said.

Griffith added that the Yamana deal would give Gold Fields - which has operations in South Africa, Australia, Ghana and Peru as well as a project in Chile - a foothold in Canada and potential cost savings in South America.

Gold Fields shares were down 2.2% by 0852 GMT.

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