Gold Fields to Buy Gold Road for $2.39 Billion
Gold Road Resources, Australia-based mid-tier gold producer, On Monday said that it has agreed to an improved $2.39 billion takeover bid from South Africa’s Gold Fields, which is its 50:50 joint venture partner for the Gruyere gold mine in Western Australia.
Under the proposed deal, Gold Road shareholders will receive a fixed cash consideration of $1.63 a share plus a variable cash consideration for the company’s holding in Northern Star Resources, which is currently valued at $57 cents a share.
The total cash consideration of $2.20 a share represents a 43% premium to its closing share price on March 21, and is a 12% improvement on Gold Fields’ initial offer, the Australian gold miner said.
Gold Road resources said that its board has unanimously recommended in favour of the Gold Fields offer and that shareholders with 7.5% interest have provided confirmation that they intend to vote in four of the deal.
The acquisition is subject to various conditions, including approval from Gold Road’s shareholders at a meeting anticipated to take place in September.
If Gold Fields successfully acquires Gold Road, it will consolidate its ownership of Gruyere, of which it is currently manager. Gruyere is expected to produce 325,000–355,000 ounces (oz) in 2025, despite lower production delivered for the March 2025 quarter.
Gold Road Resources Chairman Tim Netscher said that the Board has been focused at all times on ensuring that we deliver value and act in the best interest of the shareholders.
Netscher said that the Directors considered that the value offered by the all-cash scheme delivers compelling value for the company’s shareholders compared to otherwise what may be available if Gold Road continued to operate as a standalone entity.
“The deal provides ongoing exposure to the supportive gold price environment. This cash proposal accelerates realisation of Gruyere’s value and provides certainty for Gold Road shareholders at an attractive premium to trading levels prior to the receipt of the initial proposal,” he added.
Opportunity for Shareholders
Managing Director Duncan Gibbs said that this scheme provides Gold Road shareholders with an opportunity to provide certain value for their Gold Road shares at a compelling premium.
It may be recalled that Gold Road Resources rejected a $2.13 billion takeover bid from Gold Fields in March, calling the proposal “highly opportunistic” and saying it attributed no value to the potential underground expansion of the Gruyere mine in Western Australia.
The Australian miner and the Johannesburg-based Gold Fields hold an equal stake in the mine. The latest offer comes just days after Northern Star Resources completed its $3.23 billion acquisition of De Grey Mining, in which Gold Road held the largest stake.
