Gold Fields to enhance dividend policy in bid to boost Yamana deal value

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Gold Fields (NYSE:GFI) said Monday it will revise its dividend policy to enable it to declare an interim and final dividend each year based on 30-45% of normalized earnings, and will seek to list its shares in the Toronto Stock Exchange if it completes the acquisition of Yamana Gold (NYSE:AUY), in an effort to win over investors, some of whom have criticized the proposed takeover.

For the 2023 dividend cycle, Gold Fields (GFI) said it is targeting a payment totaling 45% of earnings, the top end of the new policy range.

Gold Fields (GFI) CEO Chris Griffith said he was encouraged by ongoing "constructive discussions" with shareholders, and believes the Yamana deal helps it achieve a long coveted foothold in Canada while offering synergies in South America.

In May, Gold Fields (GFI) agreed to buy Yamana in an all-stock deal valuing the Canadian company at $6.7B.

Comments

[Investor since ‘73]

AUY is being stolen.

[seekir]

Gold Fields today published an updated presentation explaining the proposed deal. 70 pages. I suggest to read.

In my opinion this combination is helpful for both companies but each of them could survive alone. Interestingly Gold Fields in the last five years had by far the better share price performance in comparison to Yamana. I'm not sure why.

Yamana brings an impressive pipeline of development projects in this proposed marriage, Gold Fields now generates much higher cash flows but their production should decline over the next few years if staying alone. This looks like a win win. Yamana could develop all this alone but it should be much easier when part of a bigger company.

The higher dividend is a sweetener but for sure not the only reason to vote yes.

[Investor since ‘73]

@seekir I believe it’s possible that AUY has been disrespected by the market for a decade because some feel that management has operated for their personal gain instead of in the shareholders’ best interests.

That may have been true in the past but recently, AUY has fattened the dividends, cut debt, made great strides in stable nations in both proven deposits and production. I believe that this is a very mispriced stock, the kind of alpha we seek. I’ve been waiting patiently for some time now and must admit to not being a fan of selling out anywhere near current prices.

Or: Maybe this is a good way to cash in a bigger golden parachute to begin retirement and the joke is on me.

[Mr.Sir]

@Investor since ‘73 both good points and we shall see

[seekir]

@Mr.Sir
As a German shareholder of Yamana I fear that I am not allowed to vote because technically too complicated. I can live with this proposed merger and without.
But someone here seems to be right: The real problem seems to be too many of the shareholders of Gold Fields voting no. How stupid are they? They enjoy the cash flows now but the development pipeline of Yamana is the future of their company.
Gold Fields needs this deal more than Yamana.

[jim8millar]

Hopefully this is a sign that shareholders will vote down the deal.

[swoody]

Love this deal. As shareholder I am
Voting yes

[akctlc]

@jim8millar I will not vote for this deal without significantly better upside. Frankly, I am heartened by this latest divvy action by GFI, they obviously do not have the necessary votes! Zero value for MARA and Marrone walking away with $60m...

[myed]

Great!!!!!!!!!!!!!