Northern Star Rejects $27 Billion Takeover Proposal From Gold Fields — 3rd Update

By Rhiannon Hoyle

Northern Star Resources rejected a US$27.2 billion takeover proposal from Gold Fields that could have created the world's second-largest gold producer, saying it was highly opportunistic and materially undervalued Australia's biggest gold miner.

In response, South Africa's Gold Fields said it will continue to seek talks with the Northern Star board, arguing that a tie-up would have strategic and financial benefits by combining eight of Australia's top 20 gold mines.

The bid came as Northern Star faces mounting pressure from activist investor Elliott Investment Management for sweeping changes.

Elliott disclosed a sizeable stake in the company in June following a series of guidance downgrades that meant Northern Star hadn't been able to benefit from record-high gold prices. It urged the miner to explore all strategic options, including a sale.

In the proposal, the South African gold miner sought to acquire each Northern Star share for 0.3125 new shares of its own and 7.25 Australian dollars, equivalent to US$5.09, in cash. Northern Star said it received the proposal on Sept. 14.

The bid implied a price of A$27.00 per share based on Gold Fields' Sept. 11 closing price, valuing Northern Star's equity at A$38.7 billion. It represented a 22% premium to Northern Star's share close that day.

"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.

Northern Star shares closed 6.2% higher at A$23.47, after rising as much as 11% earlier.

"In some respects, this puts a floor under [Northern Star's] share price since there is clear corporate interest in the company as a whole," Macquarie said in a note to clients.

Gold Fields said it had a number of discussions with Northern Star over the past six months, albeit with limited engagement.

"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," said Mike Fraser, Chief Executive of Gold Fields.

"We remain open to constructive dialogue and continue to seek engagement with the Northern Star board to discuss the merits of the proposed transaction."

Northern Star said it informed Gold Fields on Friday that the board doesn't consider it appropriate to engage further on the proposal.

Both miners have significant gold operations in Western Australia. Australia is the biggest contributor to Gold Fields' production, accounting for more than 40% of output.

Gold Fields estimates benefits from a tie-up totaling between US$4 billion and US$5 billion given the close proximity of the pair's assets. It said the combined group would have produced roughly 4.1 million troy ounces in the year to June 30, 2026.

Elliott thinks Northern Star's board "has an obligation to engage with any serious buyer," partner John Pike said in a statement.

"We believe there's immense potential for value creation at Northern Star, and any transaction would need to reflect that," he said.

Elliott last month said it held a 5.6% stake in the miner.

Northern Star said the Gold Fields bid was subject to several onerous conditions and requirements, and that a deal would have exposed its shareholders to jurisdictional and operational risks given its significant equity component. Under the proposal, Northern Star shareholders would have held roughly 33% of the combined company.

"Gold Fields has asked our shareholders to take nearly three-quarters of the consideration in Gold Fields stock, which carries a meaningfully higher jurisdictional risk profile than the exposure they hold today," said Chaney, the chairman.

Gold Fields said its proposal included a mix-and-match facility that would have enabled Northern Star shareholders to receive either all cash or all shares if they wanted, subject to caps. It said it intended to establish a secondary listing on the Australian Securities Exchange.

Northern Star has recently grappled with operational challenges, including at a plant that processes ore from its biggest Western Australia mine site. It downgraded guidance to investors several times over the past year.

The company has assured investors it is working to address concerns about its operational performance.

It recently appointed ex-Anglo American Chief Executive Mark Cutifani and former Orion Resource Partners managing partner Peter Rozenauers as independent nonexecutive directors, after naming the head of Glencore's nickel and zinc industrial assets, Suresh Vadnagra, as chief executive. Vadnagra is scheduled to take over the role on Oct. 5.

The company said it owns high quality, long-life gold assets, and that it should benefit from the commissioning and ramp-up of a major mill expansion in the near term.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

September 28, 2026 04:16 ET (08:16 GMT)

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