Gold Fields aims to woo Northern Star investors after miner's rebuff
GFI•Gold Fields may pursue Northern Star Resources again after the Australian miner rejected its A$38.7 billion ($27.1 billion) takeover proposal. Investors briefed by Gold Fields expect it may improve the offer, likely with more cash, after a road show in Australia in late October.
1. Possible revised offer
Gold Fields could make another run for Northern Star after its takeover proposal was rejected. The South African miner will host a road show and site visits in Australia from late October; investors briefed by Gold Fields said they expect a revised offer, most likely with more cash, though no decision had been made.
2. Valuation and synergies
Gold Fields offered A$38.7 billion in cash and shares. Investors said the largely share-based proposal was difficult to assess because Gold Fields' operations were not well known in Australia. Gold Fields expects $4 billion to $5 billion in corporate, operational and portfolio-optimisation synergies from a deal; an analyst estimated tax synergies could account for about 60% of the identified total.
3. Shares and next steps
Northern Star shares rose as much as 9% to A$25.59 on Wednesday, above the rejected offer's A$23.76 implied value based on Tuesday's close, and finished up 6.3% at A$24.77. Gold Fields shares were up 0.3% at 604.97 rand. Northern Star's new CEO, Suresh Vadnagra, is due to take up the role on October 5.
