Australian gold producer Gold Road Resources (ASX: GOR) rejected a $2.1 billion all-cash takeover offer from South African miner Gold Fields (JSE, NYSE: GFI) on Monday, saying the bid materially undervalues the company and is “highly opportunistic.”
Gold Fields offered A$3.05 per share, a 28% premium to Gold Road’s March 21 closing price. The offer comprised A$2.27 cash per share plus a variable amount equal to shareholders’ interest in Gold Road’s stake in De Grey Mining.
In an ASX announcement, Gold Road revealed the offer coincided with lower quarterly production due to maintenance issues, and failed to recognize the potential value of underground expansion at the Gruyere mine.
“The offer attributes no value at all to the potential underground expansion of the Gruyere mine,” Gold Road stated, noting an 18-month drilling program is underway to confirm the orebody extends at depth.
The two miners jointly operate the Gruyere mine in Western Australia, which produced record quarterly output of nearly 92,000 ounces in late 2024. Gold Road discovered the deposit in 2013 and sold a 50% stake to Gold Fields in 2016 to finance development.
Gold Road criticized Gold Fields for publicly announcing the rejected bid, calling this behavior from a joint venture partner “extremely disappointing.” The company had previously counter-proposed to purchase Gold Fields’ 50% stake in Gruyere, which Gold Fields declined.
Under existing joint venture agreements, Gold Fields is restricted from acquiring more than a 10% interest in Gold Road during a standstill period.
The takeover attempt complicates Northern Star Resources’ (ASX: NST) A$5 billion deal to acquire De Grey Mining (ASX: DEG), as Gold Road holds a 17.3% stake in De Grey.
Gold Road has appointed Gresham Partners as financial adviser and Corrs Chambers Westgarth as legal adviser. Gold Fields said it expects the deal would receive regulatory approvals but acknowledged transaction uncertainty.
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