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The Fimiston Open Pit gold mine, known as the Super Pit, operated by Kalgoorlie Consolidated Gold Mines Ltd. (KCGM), in Kalgoorlie-Boulder, Western Australia, Australia, on Sunday, Aug. 4, 2024. Photographer: Carla Gottgens/Bloomberg via Getty Images
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Northern Star Resources shares rose Monday after the miner rejected a $27 billion takeover proposal from South Africa's Gold Fields, saying the offer undervalued the company.
Shares in Australia's largest gold miner by market capitalization closed 6.15% higher, after jumping more than 9%.
Gold Fields proposed acquiring 100% of Northern Star, offering 0.3125 Gold Fields share and 7.25 Australian dollars for each Northern Star share, according to a statement from the Australian company.
Shares of Northern Star Resources.
The proposal, received Sept. 14, initially valued Northern Star at A$38.7 billion ($27.15 billion), representing a 22% premium to its closing price on Sept. 11. Based on Gold Fields' closing share price on Friday, Sept. 25, the implied value had fallen to A$36.1 billion.
Northern Star said its board unanimously rejected the proposal, adding it "materially undervalues" the company and was "highly opportunistic."
"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," Northern Star Chairman Michael Chaney said.
The miner also raised concerns that most of the offer would be paid in Gold Fields shares and that the proposal was subject to several conditions.
Northern Star told Gold Fields on Friday that its board did not consider it appropriate to engage further on the proposal.
Bloomberg earlier reported that Gold Fields had approached Northern Star about a potential takeover.
