Gold Fields sweetens Yamana bid with pay-out policy & proposed TSX listing

South African miner Gold Fields is making strides to solidify its $6.7 billion bid for Canada's Yamana Gold with the implementation of an enhanced dividend policy and a possible listing on the Toronto Stock Exchange. The recent developments follow Gold Fields' initial announcement of plans to acquire Yamana, a move that would position it as the world's fourth-largest gold miner. During an interview with CNBC Africa, Gold Fields CEO Chris Griffith shed light on the rationale behind these changes and how they aim to address shareholders' concerns. Several key points emerged from the discussion. Firstly, Gold Fields is committed to keeping the deal structure intact while addressing shareholders' apprehensions regarding dividend payouts and short-term dilution. By increasing the dividend policy to a range of 30 to 45%, the company seeks to instill confidence in its cash generation capabilities and alleviate concerns about future returns. Additionally, in 2023, Gold Fields plans to pay dividends towards the upper end of the range to offset potential short-term dilution. Griffith emphasized that while the company is attentive to shareholders' feedback, the core structure of the Yamana acquisition remains unchanged. Secondly, following engagements with Canadian shareholders of Yamana, Gold Fields is considering a listing on the TSX based on their recommendations. Despite concerns about additional costs from the listing, Griffith expressed optimism, highlighting that the benefits of expanded market access would outweigh these expenses. Lastly, Griffith addressed investor skepticism regarding the acquisition's timing and valuation. He clarified that the $6.7 billion price tag aligns with fair value assessments, emphasizing that the deal represents a premium compared to Yamana's trading value at the time. Griffith underscored the strategic significance of the acquisition, citing the potential for value creation and synergy between the two companies' assets. The CEO defended the acquisition's timing, arguing that the current market conditions present a favorable opportunity for the deal and offer significant upside potential for shareholders. Griffith noted that Gold Fields is focused on long-term value creation, balancing the demands for short-term returns with strategic investments for sustainable growth. Despite some shareholder concerns about short-term dilution, Griffith emphasized the company's commitment to enhancing shareholder value through prudent investment decisions. Overall, Gold Fields' proactive approach to address shareholder feedback underscores its commitment to creating long-term value for stakeholders.