Yamana Gold shareholders approve takeover bid

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Yamana Gold Inc. [YRI-TSX, AUY-NYSE] shareholders have approved a previously announced plan that enables Pan American Silver Corp. [PAAS-TSX, NASDAQ] to acquire all the issued and outstanding shares of Yamana before selling certain subsidiaries and partnerships that hold Yamana’s interests in its Canadian assets to Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE).

That would include a 50% interest in the Canadian Malartic mine, which ranks as Canada’s largest gold mine and Yamana’s biggest producer. The mine is currently held jointly by Agnico-Eagle and Yamana.

The proposed transaction is expected to be completed during the first quarter of 2023, subject to approval by the Ontario Superior Court of Justice, approval from the Mexican Federal Economic Competition Commission and the satisfaction or waiver of certain other closing conditions.

Yamana is a Canadian precious metals producer with significant gold and silver production, development stage properties and exploration properties in the Americas, including Brazil, Argentina, Chile, Mexico and Canada.

The arrangement is expected to establish Pan American as a major precious metals producer in Latin America, with approximately 28.5 to 30 million ounces of annual silver production and approximately 1.1 to 1.2 million ounces of annual gold production, based on Pan American’s and Yamana’s 2022 guidance.

The combined portfolio would consist of 12 operations concentrated in Latin America. The deal would also give Agnico-Eagle operational control of the Canadian Malartic mine during the remaining development of the Odyssey project at Canadian Malartic and future projects nearby.

Yamana shareholders have approved the offer after the company previously rejected an alternative offer that would have seen the company being acquired by South African giant Gold Fields Ltd. [GFI-NYSE, GFI].

The Gold Fields transaction, worth US$6.7 billion, would have made the combined company the globe’s third largest gold producer and fourth largest by market capitalization.

The Pan American and Agnico transaction will be implemented by way of a plan of arrangement. The consideration being offered consists of 153.5 million common shares of Pan American; US$1.0 billion in cash contributed by Agnico-Eagle, and 36.1 million common shares of Agnico Eagle.

Under the offer, each Yamana share would be exchanged for approximately US1.04 in cash, 0.1598 Pan American shares and 0.0376 Agnico Eagle shares, for an aggregate value of US$4.8 billion or US$5.02 per Yamana share, based on the closing price of Pan American and Agnico-Eagle shares on November 3, 2022.

Yamana announced that the Pan American/Agnico proposal has been approved after the close of trading on January 31, 2023, when Pan American shares closed at $24.10. The shares currently trade in a 52-week range of $38.51 and $18.14.

Agnico-Eagle shares closed at $74.96 and currently trade in a 52-week range of $84.66 and $48.87.

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