(Alliance News) - Gold Fields Ltd said on Tuesday it had withdrawn its offer for Yamana Gold Inc, expressing its disappointment with the outcome that will see it pocket USD300 million in termination fee nonetheless.

This comes after Yamana on Tuesday endorsed a joint offer from Pan American Silver Corp and Agnico Eagle Ltd, with its board recommending that shareholders vote against the Gold Fields bid that it previously supported.

Yamana will be required to pay a termination fee of USD300 million to Gold Fields within two business days.

In a statement on Tuesday, Yamana said it had entered into an arrangement agreement with Agnico Eagle and Pan American.

Gold Fields said it was "disappointed" by this outcome, and insisted that its offer was a financially and strategically superior offer for shareholders of both Gold Fields and Yamana.

The Johannesburg-based gold miner said it believed the most disciplined and prudent course of action to maximise its shareholder value was to terminate the arrangement agreement.

Pan American and Agnico Eagle made an unsolicited joint offer for Toronto-based Yamana last Friday. Yamana and Gold Fields had entered into a definitive agreement for an all-share takeover deal on May 31.

In Johannesburg, Gold Fields shares lost 1.0% to ZAR152.40 at the close on Tuesday. Yamana rose 1.9% to 433.22 pence in London. In the New York on Tuesday, Yamana jumped 6.5% at USD5.19. It has a market capitalisation of about USD5.00 billion.

Under the new joint bid tabled on Friday, the consortium offered USD1.0 billion in cash, plus about 153.5 million shares in Pan American, which is listed on Nasdaq, and some 36.1 million shares in Agnico Eagle, which is on the New York Stock Exchange.

At the time, this offer amounted to around USD4.8 billion, compared to Gold Fields' USD4.3 billion.

Yamana said on Tuesday: "The board has unanimously determined in good faith, after consultation with its outside financial and legal advisors, and upon the unanimous recommendation of the special committee of independent directors of the board, that the Agnico-Pan American transaction is a 'Yamana superior proposal' in accordance with the terms of Gold Fields arrangement agreement."

Yamana shareholders would have voted on the proposed Gold Fields acquisition at a special general meeting on November 21.

By Artwell Dlamini; artwelldlamini@alliancenews.com

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