Saying the bid “is highly opportunistic in nature,” Australian miner Gold Road Resources LTD. said Monday it has turned down a hostile-takeover offer from South Africa-headquartered Gold Fields Ltd.
Gold Fields (GFI) was offered to pay A$3.05 ($1.92) per share in cash, split between A$2.27 a share plus a variable portion equal to the proportion of Gold Road’s shareholding in De Grey Mining.
Offering a 28% premium over the closing share price Friday of A$2.38, the acquisition had a total enterprise value of A$2.4 billion.
Gold Fields claimed it sought to acquire complete ownership of Gruyere, a joint-venture gold mine run between the two Western Australian businesses.
Driven by a difficult moment for risk assets generated by President Donald Trump’s tariffs, deteriorating consumer confidence and ongoing inflation, the offer comes as gold prices have skyrocketed to fresh record highs above $3,000 an ounce.
The denial disappointed Gold Fields, which stated the proposal “would have allowed both parties to confidentially progress towards an outcome that would deliver compelling and certain value to Gold Road shareholders.”
Gold Road said that its Board “unanimously formed the view that the offer materially undervalues Gold Road and is highly opportunistic innaturistic.”
Instead, Gold Road proposed to buy Gold Fields’s share in the Gruyere joint venture; unfortunately, that bid was also turned down.
“Gold Road has actively corresponded and discussed with Gold Fields to consider whether Gold Fields would address the shortcomings of its offer,” the business stated in a statement.
Though eager to participate, Gold Fields decided to make public the offer and terms instead.
“Gold Road finds this behaviour of a joint venture partner, which Gold Road invited into Gruyere in 2017, quite disappointing,” added the statement.
Gold Fields claimed to back Northern Star Resources’ A$3.3 billion offer for De Grey as part of their offer. Based on FactSet, Gold Roads is the largest stakeholder of that company at 17.3%.
While the S&P 500 SPX has risen 8%, Gold Field’s U.S.-listed stock was down 2% in premarket activity but has increased 43% over the past 12 months.
