Australia's Northern Star rejects $27 billion takeover approach from Gold Fields
GFI•Northern Star rejected Gold Fields' A$38.7 billion ($27.1 billion) takeover proposal, which valued its shares at A$25.19, a 14% premium to its previous close. Gold Fields said it remains open to dialogue and expects $4 billion to $5 billion in synergies from a deal.
1. Proposal rejected
Northern Star Resources said it rejected an unsolicited takeover proposal from South Africa's Gold Fields. The offer would have given Northern Star shareholders 0.3125 new Gold Fields shares and A$7.25 in cash for each share.
2. Valuation concerns
Northern Star said the proposal was worth A$27.00 per share when received on September 14, but had fallen to A$25.19 based on Gold Fields' Friday closing price. That represented a 14% premium to Northern Star's last close. Northern Star said the offer undervalued its assets and exposed shareholders to Gold Fields' higher jurisdictional risk.
3. Gold Fields seeks talks
Gold Fields said it believed the deal offered strategic and financial benefits and continued to seek engagement with Northern Star's board. It estimated $4 billion to $5 billion in synergies and said the combined company would produce 4.1 million ounces of gold annually. Activist investor Elliott, which holds 6.2% of Northern Star, said the board should engage with any serious buyer.
