Gold Fields shares fell hard by 14.56% in midday trade on the JSE after the company confirmed that its A$38.7bn (about R445 billion) cash-and-share takeover offer for Northern Star had been turned down.
Northern Star Resources, a gold mining company listed on the Australian Securities Exchange, operates in Western Australia and Alaska. Earlier this month, Gold Fields offered to acquire 100% of the ordinary shares in Northern Star by way of a scheme of arrangement.
However, the Northern Star board turned down the offer, saying “it was not appropriate to engage in further discussions at this time” regarding the proposed offer.
It said in a statement that the offer "materially undervalued" Northern Star, the large equity component of the deal would expose it to "jurisdictional and operational risks" to which its shareholders were not exposed today, and Northern's board viewed the deal as "highly opportunistic", having been made ahead of near-term value catalysts for the group. The board also said regulatory and shareholder approvals required would result in a prolonged period of uncertainty for shareholders.
Gold Fields stock slumped 14.56% to R561.81 shortly before midday on the JSE on Monday. Over the past seven and 30 days, Gold Fields shares have traded 5.87% and 14.46% lower, respectively.
Gold Fields, however, explained that the offer for Northern Star was consistent with its strategy to improve the quality and value of its portfolio through investment in high-quality, long-life assets.
“Gold Fields considers that there is strong strategic rationale for the proposed transaction, as Northern Star’s assets are highly complementary with Gold Fields’ portfolio, and together would create a world-class pure-play senior gold producer with a compelling growth profile,” said the company.
Northern Star has a high-quality portfolio of gold-mining assets centred around three primary production centres in Western Australia and Alaska, USA. Its major revenue drivers include the Kalgoorlie, Yandal and Pogo production assets, which are supported by other operations and development projects.
The tie-up with Northern Star would offer Gold Fields the opportunity to develop a combined group with a significant land position in Western Australia.
The combination would also yield a sector-leading production profile, reserve life and growth pipeline, with the opportunity to unlock meaningful operational, corporate and portfolio-optimisation synergies estimated at $4 billion to $5bn across the combined group.
Mike Fraser, CEO of Gold Fields, said Gold Fields would bring proven operational and development capability to Northern Star’s portfolio.
“While we are disappointed that the Northern Star board has not yet chosen to engage on a proposal that we continue to believe offers compelling strategic and financial benefits for both sets of shareholders, we remain open to constructive dialogue and continue to seek engagement with the Northern Star board to discuss the merits of the proposed transaction,” said Fraser.
He added that Gold Fields remained committed to maintaining a strong balance sheet, with sufficient liquidity and financing flexibility to support its strategic priorities, including the proposed offer for Northern Star.
Under the proposed transaction’s terms, Northern Star’s shareholders would receive 0.3125 Gold Fields shares and A$7.25 (about R83.64) in cash for each Northern Star share held. This represents an implied offer price of A$27.00 (R311.50) per Northern Star share as at September 13, 2026.
Under the transaction, Northern Star shareholders would own approximately 33% of Gold Fields’ shares. Northern Star shareholders would also have a mix-and-match facility enabling them to elect to receive the default consideration, 100% cash or 100% shares.
This would be subject to a customary scale-back mechanism to cap the total amount of cash consideration paid to Northern Star shareholders at A$10.4bn. The total number of new Gold Fields shares proposed to be issued to Northern Star shareholders stands at 447 million.
If approved, the combination between the two companies would create a globally diversified gold producer with scale, quality and clear operational upside, with the capacity to produce approximately 4.1 million ounces in the 12 months to June 30, 2026.
Approximately 80% of production would come from Australia, North America and Chile, underpinned by 77 million ounces of ore reserves and 181 million ounces of mineral resources.
THE NATIONAL