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The board of South Africa’s Gold Fields GFI-N will not change its offer for Yamana Gold YRI-T after a surprise rival bid from Agnico Eagle and Pan American, it said on Monday.

Gold Fields’ decision reflects “commitment to capital discipline” and to fairness for shareholders in Gold Fields and Yamana, the South Africa-listed miner said on Monday.

The joint cash and stock offer from Agnico Eagle and Pan American on Friday trumped the Gold Fields bid, which valued Yamana at around $4.2-billion at Thursday’s close. Under the offer, Yamana shareholders would receive $1.0406 in cash, 0.0376 of an Agnico share and 0.1598 of a Pan American share for each share held.

The two offers are neck-and-neck after Friday’s share price moves – with Gold Fields shares jumping 11 per cent and Pan American shares falling by 4 per cent – reduced the gap between the implied value they give Yamana.

But the cash component in the Agnico/Pan American bid could give it an edge, particularly given market volatility, analysts said.

“Cash is cash, and it’s not tied to the gold price,” said Arnold van Graan, head of markets research at Nedbank in Johannesburg. “I don’t think Gold Fields actually can increase the offer, but maybe a cash component could push it across the line.”

Gold Fields shares fell by 20 per cent when it announced the all-stock deal in May, denting the deal’s appeal for Yamana shareholders. When first announced, it valued Yamana at $6.7-billion.

Gold Fields on Monday reiterated the stance it took on Friday, saying it would work towards completing the takeover ahead of shareholder votes on it in two weeks’ time.

The Agnico/Pan American offer would only become effective if Yamana shareholders vote against Gold Fields’ offer on Nov. 21. In that scenario, Yamana would have to pay Gold Fields a $300-million break fee.

The price of gold has fallen from around $2,000 an ounce in March to about $1,650 as central banks raise interest rates to combat inflation. That has driven gold miners’ shares down and thrown into doubt M&A potential in a sector investors say needs consolidation to reduce costs.

The counter-bid for Yamana shows gold miners are keen for new assets to supplement dwindling gold reserves and ensure their long-term growth, but Gold Fields’ decision not to raise its bid is a sign of fears about overpaying.

“We do not believe GFI (Gold Fields) is looking to acquire Yamana at all costs despite the strategic rationale,” Investec analysts wrote in a note.

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