Jan 8 (Reuters) - Pan American Silver Corp's $1.07 billion cash-and-stock offer to buy rival Tahoe Resources Inc was approved by shareholders of both companies on Tuesday, putting responsibility for Guatemala's troubled Escobal mine in the hands of a new owner.
Pan American believes it can eventually re-open Escobal, the world's second-largest silver mine, succeeding where Tahoe has so far failed. The mine has been shuttered since 2017 amid a long-simmering feud with the Xinca indigenous population.
Vancouver-based Pan American plans to meet frequently with local communities in Guatemala to understand their concerns about the mine and try to find common ground, Chief Executive Michael Steinmann said in an interview.
"This will take a lot of listening and discussions with the communities to make sure that we understand their needs," Steinmann said. "We're very early in this process. There's absolutely no rush."
That represents a more conciliatory approach than that taken by Tahoe, which had been accused of paying too little attention to the worries of local populations. Steinmann declined to predict when Escobal could re-open.
Reno, Nevada-based Tahoe had said last autumn that it wanted to restart Escobal by the end of 2019, an aggressive timeline that activists on the ground in the Latin American country saw as unrealistic.
Pan American offered $3.40 per share for Tahoe last November, a nearly 35 percent premium to Tahoe's average share price in the 20 days ahead of the offer.
About 95 percent of Tahoe's outstanding shares that were voted at a special meeting on Tuesday were cast in support of the deal, with nearly all of Pan American shareholders approving the issuance of new stock to fund the transaction, the companies said in statements.
Regulators in British Columbia are expected to approve the deal later this week, with final closing on Feb. 26.
Escobal is "a world-class silver mine in terms of quality and scale," said Michael Gray, an analyst at Macquarie Capital Markets. "That's why Pan American is taking a shot to acquire it."
But the Xinca, a farming community of about 400,000, strongly oppose the mine due to worries it will harm their homeland and water.
"The Xinca aren't in opposition to the mine because it's fun," said Ellen Moore of Earthworks, an environmental group advocating for the Xinca. "They see the mine as a threat to their livelihood and environment."
Some investors considered Pan American's bid for Tahoe to be opportunistic after Tahoe's shares more than halved in the year ahead of the offer.
Silver prices have also dipped nearly 9 percent in the past year, though they are expected to rebound more than 5 percent this year and next year, due in part to undersupply concerns.
"You can't blame Pan American for buying Tahoe on the cheap," said John Tumazos, an investor and mining analyst who owns shares in both companies.
In a sign of Wall Street's mixed feelings on the deal, Tumazos said he voted his Tahoe shares against the deal but his Pan American shares in support. (Reporting by Ernest Scheyder and Nichola Saminather Editing by Bill Rigby)