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(Sharecast News) - Australian gold miner Northern Star said on Monday that it has rejected a AUD38.7bn ($27.1bn) unsolicited takeover proposal from South Africa's Gold Fields.
Under the terms of the proposal, Northern Star shareholders would have received 0.3125 new Gold Fields shares and AUD7.25 in cash per share.
The proposal, received on 14 September, represented a 22% premium to Northern Star's closing share price on 11 September and a 15% premium to the 30-day volume-weighted average price.
Northern Star - Australia's largest gold miner by market capitalisation - said the proposal was unanimously rejected on the basis that it "materially" undervalues the company and does not reflect the fundamental value of its tier-1, long-life asset base in low-risk jurisdictions or the growth profile of the portfolio.
It also pointed to the "material" equity component, which it said would expose Northern Star shareholders to jurisdictional and operational risks to which they are not exposed today.
The company said the proposal was "highly opportunistic", having been made ahead of near-term value catalysts for Northern Star, including the commissioning and ramp-up of the Fimiston Mill and the commencement of the incoming managing director and chief executive officer, Suresh Vadnagra.
Northern Star chairman Michael Chaney AO said: "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.
"Furthermore, Gold Fields has asked our shareholders to take nearly three-quarters of the consideration in Gold Fields stock, which carries a meaningfully higher jurisdictional risk profile than the exposure they hold today. These factors, in conjunction with the conditionality of the indicative proposal, are the basis on which the board has unanimously rejected the indicative proposal."
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