Northern Star rejects Gold Fields' $27bn takeover, shares jump 9%
Australia's biggest gold miner calls the unsolicited South African bid 'opportunistic' and undervalued, even as activist investor Elliott presses the board to engage.
What to know
- Northern Star rejected a A$38.7bn ($27.1bn) unsolicited takeover proposal from Gold Fields, calling it highly opportunistic and undervalued.
- A successful deal would have ranked among the largest-ever takeovers of an Australian company; shares jumped over 9% on the rejection but stayed below the implied offer price.
- The bid's offered premium of about 14% falls short of the roughly 30% premium typically needed for Australian takeovers to succeed.
- Activist investor Elliott Investment Management, which pushed for this review and holds ~5.6% of Northern Star, says the board should still engage with serious buyers.
Northern Star Resources Target company / Australia's top gold producerGold Fields South African gold miner making the bidMichael Chaney Northern Star ChairmanElliott Investment Management Activist investor holding ~5.6% of Northern StarJohn Ayoub Portfolio manager, Wilson Asset Management
How it unfolded 1 development · click the chart to see its coverage articles
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Northern Star shareholder backs the rejection — Portfolio manager John Ayoub of Wilson Asset Management, a Northern Star shareholder, said the bid looked opportunistic and agreed with the board's decision.
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Elliott says board must engage with serious buyers — Elliott partner John Pike said the board had an obligation to engage with any serious buyer, even as Northern Star rejected the specific proposal.
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“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…”
— Michael Chaney, Northern Star Chairman -
6 outlets first by CNBC, 1d ago · also Seeking Alpha, Investing.com News, FT, WSJ, Reuters · read ↗
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Gold Fields submits A$27.00-a-share takeover proposal — Gold Fields sent Northern Star an unsolicited offer of 0.3125 new Gold Fields shares plus A$7.25 cash per share, valued at A$27.00 a share at the time; the value had since slipped to A$25.19.
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Northern Star appoints new CEO under Elliott pressure — The Perth-based miner named a new chief executive in July after pressure from Elliott.
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Elliott Investment Management pushes for a strategic review — Activist investor Elliott, holding about 5.6% of Northern Star, urged the miner to conduct a strategic review that it said could result in a sale to a rival such as Gold Fields.