MELBOURNE: South Africa’s Gold Fields will acquire Gold Road Resources in a sweetened deal valuing the Australian miner’s equity at A$3.7bil (US$2.39bil), Gold Road says, as sky-high bullion prices drive a wave of tie-ups.
Gold Road’s shares rallied as much as 12% on the offer, which was pitched at a 14.5% premium to the company’s last closing price.
The buyout will allow Gold Fields 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.
It is the third notable deal in six months in the sector that is one of the hottest spots globally for mergers and acquisitions, as rising geopolitical uncertainties power a record rally in the yellow metal.
Australian gold miner Northern Star Resources agreed in December to buy De Grey Mining in an all-share deal worth A$5bil, while Ramelius Resources said it would take over smaller peer Spartan Resources to build a combined A$4.2bil group.
Under the terms announced yesterday, Gold Road shareholders will receive a fixed cash consideration of A$2.52 per share and a variable cash component equal to the full value of the each shareholder’s stake in Northern Star Resources.
That was up from Gold Fields’ offer in March of A$2.27 cash per share plus the variable cash component, which Gold Road rejected as “highly opportunistic”.
As of last Friday’s close, the deal between the South African and Australian firms equates to A$3.40 per Gold Road share.
Gold Fields said last Friday that it was in active discussions with Gold Road, but did not immediately respond to a request for comment yesterday outside of normal office hours. — Reuters
