Gold Fields to buy Australia’s Gold Road in $2.4 billion deal
South African gold miner Gold Fields will acquire Gold Road Resources in a deal valuing the Australian miner’s equity at A$3.7 billion ($2.39 billion), Gold Road said on Monday.
Under the deal, Gold Road shareholder will receive a fixed cash consideration of A$2.52 per share, minus any special dividends, and a variable cash component equal to the full value of the each shareholders’ proportion of stake in Northern Star Resources.
As of Friday, the deal equates to A$3.40 per Gold Road share which represents a 14.5% premium to the company’s last closing price.
The deal comes after Gold Road rejected Gold Fields’ $2.1 billion buyout bid in March because it believed the offer materially undervalued the company and was “highly opportunistic”.
The buyout would help the South African miner to consolidate ownership over the low-cost, long-life Gruyere gold mine in Western Australia, which it operates under a joint venture with Gold Road, at a time of sky high bullion prices.
($1 = 1.5504 Australian dollars)
(By Himanshi Akhand; Editing by Kim Coghill)
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