Northern Star rejects Gold Fields' $27 billion bid to create world's No. 2 gold miner
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 prior close. Gold Fields said it remained focused on engaging with Northern Star's board.
1. Offer rejected
Northern Star said it rejected an unsolicited proposal received on September 14. The offer comprised 0.3125 new Gold Fields shares and A$7.25 in cash for each Northern Star share, and was worth A$25.19 per share based on Gold Fields' Friday closing price.
2. Board cites concerns
Northern Star said the proposal undervalued its long-life assets and would leave shareholders with significant exposure to Gold Fields stock, which it described as carrying a higher jurisdictional risk profile. Chairman Michael Chaney said the offer fell well short of the board's view of the company's fundamental value. Gold Fields Chief Financial Officer Alex Dall said the company remained focused on constructive engagement with the board.
3. Deal rationale and response
Gold Fields said the deal could generate $4 billion to $5 billion in corporate, operational and portfolio optimisation synergies and create a company producing 4.1 million ounces of gold annually. Activist investor Elliott, which said it holds 6.2% of Northern Star, said the board had an obligation to engage with any serious buyer.
