Top investor opposes Yamana takeover of Gold Fields

JOHANNESBURG (Reuters) – A leading investor has come out against Gold Fields’ proposed $6.7 billion takeover of Canada’s Yamana Gold.

Joe Foster, who manages active gold funds at investment firm VanEck, which is Yamana’s largest shareholder, said the merger would create a more complex company with less synergy, and that both Yamana and Gold Fields would be better on their own than as a combined group.

VanEck is Gold Fields’ fourth largest shareholder.

“I don’t endorse the deal on either side,” Foster told Reuters on Thursday. “It’s a deal that just doesn’t make basic sense to me.”

Gold Fields argued that the acquisition, which would create the world’s fourth-largest gold miner, would provide long-term growth and deliver cost savings.

Shares in the South African-listed miner fell sharply when it announced the proposed deal in May, and the CEOs of both companies have struggled to convince investors of its merits in the months since.

For the all-share deal to go through, it must win the approval of 66.67% of Yamana shareholders and 75% of Gold Fields shareholders in votes scheduled for Nov. 21 and Nov. 22 respectively.

Which way the votes will go is “up in the air” at the moment, Foster said.

Yamana shares are trading at a discount to the offer price, indicating uncertainty in the market.

(Reporting by Helen Reid; Editing by Susan Fenton)

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