Northern Star shares boom as Australian mining company rejects $27 billion takeover proposal
The Fimiston open pit gold mine, known as the Super Pit, operated by Kalgoorlie Consolidated Gold Mines Ltd. (KCGM), in Kalgoorlie-Boulder, Western Australia, Australia, on Sunday, August 4, 2024. Photographer: Carla Gottgens/Bloomberg via Getty Images
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North Star Resources Shares jumped more than 9% on Monday after the Australian mining company rejected a $27 billion takeover proposal from South African firm Gold Fields, saying the offer undervalued the company.
Gold Fields has proposed to acquire 100% of Northern Star through a combination of shares and cash, offering 0.3125 Gold Fields shares and A$7.25 in cash for each Northern Star share, according to a statement released by Northern Star on Monday.
Northern Star Resources shares.
The proposal, received on September 14, initially valued Northern Star at A$38.7 billion ($27.15 billion), representing a 22% premium to its September 11 closing price. Based on Gold Fields’ closing share price on Friday September 25, the implied value had fallen to A$36.1 billion.
Northern Star said its board unanimously rejected the proposal, adding that it “materially undervalued” the company and was “highly opportunistic”.
“Gold Fields sought to acquire one of the world’s largest gold holdings at a price well below what the Board considers to be its fundamental value and at a very opportune time,” said Michael Chaney, chairman of Northern Star.
The miner also raised concerns that most of the offer would be paid in Gold Fields shares and that the proposal was subject to several conditions.
Northern Star told Gold Fields on Friday that its board did not consider it appropriate to engage further on the proposal.
Bloomberg earlier reported that Gold Fields had contacted Northern Star about a possible takeover.
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