South Africa's Gold Fields will acquire Gold Road Resources in a sweetened deal valuing the Australian miner's equity at A$3.7bn (R44bn), Gold Road said on Monday, 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$5bn (R59.3bn), while Ramelius Resources said it would take over smaller peer Spartan Resources to build a combined A$4.2bn (R50bn) group.
The strong gold price and Australia's relatively weaker dollar has made Australian gold producers particularly attractive, said one investment banker. Bellevue Gold, with a A$1.3 billion market capitalisation, is expected to be the next to follow suit after it last month hired UBS to conduct a review of its business.
Asked if Gold Fields was interested in Bellevue Gold, Gold Fields CEO Mike Fraser said the company continued to look at opportunities to strengthen its portfolio. Gold Fields operates the Agnew mine not far from Bellevue's own project.
"Given what we have just announced today I think our focus in the coming months will be on that, but we continue to look out for good opportunities to improve our portfolio," he told reporters on a conference call.
Under the terms announced on Monday, Gold Road shareholders will receive a fixed cash consideration of A$2.52 (R30) 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 Friday's close, the deal equates to A$3.40 (R27) per Gold Road share.
.
Reuters
Gold Fields to buy Australia’s Gold Road in A$3.7bn deal
Image: Philip Mostert
South Africa's Gold Fields will acquire Gold Road Resources in a sweetened deal valuing the Australian miner's equity at A$3.7bn (R44bn), Gold Road said on Monday, 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$5bn (R59.3bn), while Ramelius Resources said it would take over smaller peer Spartan Resources to build a combined A$4.2bn (R50bn) group.
The strong gold price and Australia's relatively weaker dollar has made Australian gold producers particularly attractive, said one investment banker. Bellevue Gold, with a A$1.3 billion market capitalisation, is expected to be the next to follow suit after it last month hired UBS to conduct a review of its business.
Asked if Gold Fields was interested in Bellevue Gold, Gold Fields CEO Mike Fraser said the company continued to look at opportunities to strengthen its portfolio. Gold Fields operates the Agnew mine not far from Bellevue's own project.
"Given what we have just announced today I think our focus in the coming months will be on that, but we continue to look out for good opportunities to improve our portfolio," he told reporters on a conference call.
Under the terms announced on Monday, Gold Road shareholders will receive a fixed cash consideration of A$2.52 (R30) 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 Friday's close, the deal equates to A$3.40 (R27) per Gold Road share.
.
Reuters
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