The Canadian Malartic open-pit gold mine in northwestern Quebec. (Image courtesy of Canadian Malartic)
Two proxy firms are recommending that Yamana Gold (TSX:YRI; NYSE:AUY) accept a $1 billion takeover offer from Vancouver’s Pan American Silver (TSX,NYSE:PAAS).
Yamana Gold announced Friday that Institutional Shareholder Services and Glass, Lewis & Co. LLC are recommending the company accept Pan American’s offer to acquire all of Yamana’s issued and outstanding shares.
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As part of the deal, Yamana Gold would sell its Canadian assets to Agnico Eagle Mines Ltd. (TSX:NYSE:AEM), including its 50% share of Canadian Malartic mine, which Yamana co-owns with Agnico.
Canadian Malartic, near Val-d’Or, Quebec, is Canada’s largest operating gold mine. It was developed by Osisko Mining, and acquired by Yamana and Agnico in 2014.
Yamana Gold has five operating mines – including Canadian Malartic – that produced 1 million ounces of gold in 2021. Through the acquisition, Pan American will acquire four operating gold mines and a number of development projects in Latin America.
Yamana Gold shareholders will receive $1 billion in cash, and 153.5 million common shares of Pan American and 36.1 million common shares of Agnico. Shareholders would receive receive $1.0406 — 0.0376 of an Agnico Share and 0.1598 of a Pan American Share — for each common share held, according to a press release in November.
“Yamana investors are poised to receive, among other things, significant exposure to what we consider to be two highly credible operators with more tailored regional bona fides, compatible assets and a more credible ability to fully realize the potential of Yamana’s blended portfolio,” Glass Lewis said in a Yamana Gold news release.
“We further consider the associated terms appear to reflect a reasonable value for Yamana investors, and would further note post announcement trading trends and fixed exchange ratios have further increased that value roughly 16.4% on a per share basis.”
Yamana Gold shareholders will vote on the offer at a special meeting January 31.
(This article first appeared in Business in Vancouver)
