Australia’s biggest gold miner Northern Star Resources has rejected a “highly opportunistic” takeover offer from South Africa’s Gold Fields.
The owner of Kalgoorlie’s famous super pit, Northern Star said it had “received, considered and rejected a confidential, opportunistic, unsolicited and conditional non-binding indicative proposal from Gold Fields,” in a statement on Monday morning.
According to the company, the indicative proposal represented an implied equity value of $38.7 billion at a 22 per cent premium to Northern Star’s closing share price on September 11 and a 15 per cent premium to its 30-day volume-weighted average price.
Northern Star appointed a new chief executive officer in July amid pressure from investor Elliott Investment Management, which this year criticised the miner’s underperformance and called for it to consider a sale or asset divestments. Elliott has also been pushing for an overhaul of the company’s board.
In a statement to the ASX, the Northern Star board said it considers its company to be uniquely positioned with a portfolio of high-quality, long-life gold assets in tier-1 mining jurisdictions and the near-term catalyst in commissioning and ramp-up of the Fimiston Mill.
“Gold Fields has sought to acquire one of the world’s premier gold portfolios at a price that falls well short of what the Board considers to be its fundamental value and at a highly opportunistic time,” chairman Michael Chaney said.
“Furthermore, Gold Fields has asked our shareholders to take nearly three-quarters of the consideration in Gold Fields stock, which carries a meaningfully higher jurisdictional risk profile than the exposure they hold today.
“These factors, in conjunction with the conditionality of the indicative proposal, are the basis on which the board has unanimously rejected the indicative proposal.”
The company added that the board remains fully committed to acting in the best interest of all shareholders.
Northern Star has cut its production guidance several times over the past year, with issues at its Kalgoorlie processing plant impacting output.
In June, Chaney wrote in a letter to shareholders that the company had been approached by several suitors about combinations over the last year but said it was not the right time to sell.
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