Gold Fields chief steps down after Yamana takeover failure
The head of Gold Fields has resigned a month after the company failed in a takeover bid that would have created the world’s fourth-largest gold mining group.
Chris Griffith will step down as chief executive of the South African company at the end of the year after a pair of rival precious metals mining groups trumped Gold Fields’ offer to buy Canada’s Yamana Gold.
Griffith said in a statement on Tuesday that he and the board had agreed the setback risked impeding the implementation of the company’s strategy if he stayed in the job.
“As CEO I felt that I should take responsibility and allow the company to move forward under new leadership unencumbered by the Yamana transaction.”
Some of Gold Fields’ largest shareholders including Redwheel Capital and VanEck came out in opposition of the all-share deal for Toronto-listed Yamana, which they argued would have been dilutive to existing shareholders.
The deal was eventually scuppered last month when Yamana supported a $4.8bn takeover bid from Agnico Eagle and Pan American — a rival approach that Griffith said had justified the large premium in the original offer.
Gold mining companies are under pressure from the rising costs of inputs such as diesel and explosives at a time when prices for the metal have slipped below $1,800 per troy ounce, after hitting a record above $2,000 earlier this year, as central banks raise interest rates.
Shares in Gold Fields, which operates nine mines across Australia, Peru, South Africa and west Africa, slumped a fifth on the day the bid was announced in May but bounced back by a similar percentage when the deal was called off. Gold Fields shares trading in Johannesburg dropped 4 per cent on Tuesday morning.
In defending the Yamana deal, Griffith said that the company’s gold production would fall off a cliff in the years ahead and that it needed to acquire a rival producer to lift its output.
Analysts believed the admission of Gold Fields’ falling production profile would make the premium for any future takeover larger than warranted.
Gold Fields chair Yunus Suleman said on Tuesday “we were all disappointed that the Yamana deal did not go through, as we felt it was a compelling deal which would have created a strong company and created value for all our shareholders”.
The company said its strategy to maximise its assets, build its environmental, social and governance commitment and expand its portfolio remained unchanged despite the departure at the top.
The board has begun a search for a new leader while Martin Preece, executive vice-president of Gold Fields South Africa, has been appointed as interim chief executive.