Gold Fields has launched a charm offensive in Australia to win over Northern Star shareholders for its A$39bn ($27bn) takeover bid. CEO Mike Fraser visited Perth, Sydney and Melbourne to meet investors and promote the merits of creating a global gold 'powerhouse' worth about $56bn. He said shareholders he met were open to a combination that would create the world’s second-largest gold miner.
Fraser noted that Northern Star’s board had rejected the offer last month as undervaluing its growth potential, but argued the deal would unlock significant synergies. Gold Fields has been courting Northern Star for a year, though management had previously resisted engagement. Activist investor Elliott Management has taken a stake in Northern Star and is pushing for talks with Gold Fields, saying it will evaluate any proposal on its merits.
Northern Star’s new CEO, Suresh Vadnagra, formerly of Glencore, is set to give his first leadership comments next week upon quarterly results. Chair Michael Chaney said the board remains focused on shareholder value and would only engage with proposals offering value above Northern Star’s standalone potential. Fraser cited risks in Northern Star’s growth pipeline, including the Hemi project in Western Australia’s Pilbara region.
Northern Star shares closed at A$24.91 on Wednesday, below the A$27 implied value of the rejected offer. Gold Fields expects $5bn in synergies from the proximity of mines in Kalgoorlie, making it hard for rivals to replicate the value. Fraser described the process as 'early days' despite the prolonged courtship.
Source: Financial Times Companies · Summarized by HeadlinesBriefing