By Sybilla Gross, Bloomberg.
Gold Road Resources rejected a private takeover offer from Gold Fields that valued the Australian miner at A$3.3 billion ($2.1 billion), with the South African company publicly announcing the proposal on Monday in a bid to win over shareholders.
Johannesburg-based Gold Fields said it put forward a non-binding offer to buy the company for A$3.05 a share in cash on March 7 implying a total enterprise value of A$2.4 billion. Gold Roads’ board rejected the offer, it said.
Surging bullion prices — which this month topped $3 000 an ounce for the first time ever — have injected life into a sector with a history of overspending and operational setbacks. The metal rallied by about 40% in the last 12 months, leading to a flurry of deals among miners — including Equinox Gold Corp’s C$2.6 billion ($1.8 billion) acquisition of Calibre Mining Corp in Canada, as well as Gold Fields’s C$2.16 billion purchase of Osisko Mining.
In a separate statement later on Monday, the Perth-based miner confirmed its decision, calling the proposal “extremely disappointing” as it undervalued the company.
Gold Fields chose to make the negotiations public hoping that even though the board privately rejected the offer, shareholders would find it “reasonably compelling,” the company’s Chief Executive Officer Mike Fraser said in an interview.
The acquisition would have consolidated Gold Fields’ 50% ownership of the joint-venture Gruyere mine it operates in Western Australia, in which Gold Road holds a 50% non-operating interest, the South African company said. Gold Road put forward an alternative proposal to buy out Gold Fields’ stake in the operation, which the counterpart rejected.
The mine — which produced 287 000 ounces of gold in 2024 — accounted for about 11% of Gold Fields’ free cash flow from extractive operations last year.
“We are the operators and we therefore think that we are the right owners of that asset long-term,” Fraser said.
In putting forward its offer, Gold Fields also said the implied enterprise value was partly based on a A$869 million valuation of Gold Road’s 17.3% stake in De Grey Mining, which in December agreed to a A$5 billion takeover offer from Northern Star Resources. Shareholders in both companies are due to vote on the deal in April.
Gold Fields reiterated that it did not have any intention to upset the deal with a competing offer and supported Northern Star’s proposed acquisition of De Grey, whose undeveloped Hemi project is set to become one of Australian’s top five gold mines.
“The timing of this transaction is driven by the Northern Star-De Grey deal,” Fraser said, adding that around a third of Gold Road’s value is attributable to the De Grey stake.