Australia鈥檚聽Gold Road Resources (ASX: GOR)聽 a A$3.3 billion ($2.1bn) takeover bid from聽South Africa鈥檚 Gold Fields (JSE, NYSE: GFI), calling the offer 鈥渉ighly opportunistic鈥� and saying it undervalued the company.
Gold Fields said the all-cash proposal amid record-high gold prices, which recently surpassed $3,000 per ounce fuelled by economic uncertainty and geopolitical tensions.
The Johannesburg-based miner had offered A$3.05 per share 鈥� a 21% premium to Gold Road鈥檚 average share price over the past month. The deal would have given Gold Fields full control of the Gruyere joint venture mine in Western Australia.
Gold Road discovered Gruyere in 2013, and sold a 50% stake to Gold Fields in 2016 to help finance mine development and further exploration.
Gold Road criticized Gold Fields鈥� decision to publicize the bid, calling it 鈥渆xtremely disappointing鈥� and arguing that it failed to recognize the value of a potential underground expansion at Gruyere. As an alternative, Gold Road proposed buying out Gold Fields鈥� 50% stake in the mine, but the company rejected the counteroffer.
鈥淕old Fields is disappointed that the Gold Road board has not constructively engaged on key elements of the proposal, which would have allowed both parties to confidentially progress towards an outcome,鈥� it said.
Gold Fields鈥� hostile bid also complicates Northern Star Resources鈥� (ASX: NST) A$5 billion ($3.5bn) deal to buy out smaller rival De Grey Mining (ASX: DEG), as Gold Road holds a 17.3% stake in De Grey.
Gold Fields would vote in favour of the Northern Star transaction, BMO Capital Markets analyst Raj Ray said聽in a note Monday. Gold Fields is restricted from accumulating a relevant interest of greater than 10% in Gold Road during the Gruyere joint venture standstill period, he added.聽
The Gruyere mine has produced more than 1.5 million ounces since kicking off operations in 2019. In the final three months of 2024, the operation recorded its highest-ever quarterly output at nearly 92,000 ounces.