Northern Star rejects Gold Fields takeover proposal; SA miner remains open to talks

Australian gold producer Northern Star has rejected a non-binding takeover proposal from South Africa’s Gold Fields, but the Johannesburg-listed miner said on Monday, 28 September, that it remains open to further talks.

Gold Fields disclosed the terms in a JSE announcement after Northern Star’s board publicly responded to speculation about the approach. The proposal offered Northern Star shareholders 0.3125 new Gold Fields shares and A$7.25 in cash for each share they held. Gold Fields valued that package at A$27 a share when it submitted the proposal in mid-September.

Northern Star’s board told Gold Fields on 24 September that further engagement was not appropriate at that time, according to the South African company’s statement. Northern Star said its directors unanimously considered the offer insufficient to reflect the value of its assets and growth prospects. The parties have not agreed a transaction.

Gold Fields said Northern Star shareholders would have owned about a third of the combined company’s shares if the proposal had gone ahead. It described the Australian miner’s operations as complementary to its own and said a combination could create a larger gold producer with substantial holdings in Western Australia.

Those benefits are Gold Fields’ estimates, not realised savings. Its projection of US$4 billion to US$5 billion in potential synergies was based on publicly available information and made without due diligence, the company said. Any transaction would depend on further engagement and approvals.

The South African group said the offer represented a 22% premium to Northern Star’s 11 September closing share price. Northern Star’s rejection means that premium has not led to an accepted bid. Gold Fields cautioned shareholders that there is no certainty that talks will resume or that any transaction will be completed.