Gold Fields considers higher cash offer for Northern Star Resources
- Gold Fields considers a higher cash payout to secure a buyout of Northern Star Resources.
- Gold Fields shares fell 12% before partially recovering, while Northern Star rejected the initial offer.
- The proposed merger aims to unite Western Australian assets and capture up to $5 billion in operational synergies.
Gold Fields is considering adding more cash to its takeover proposal for Northern Star Resources (ASX:NST) to overcome resistance to a deal that would create the second-largest gold producer globally.
The revised deliberations follow Northern Star's rejection of an initial $38.7 billion cash-and-shares offer that represented a 22% premium.
"The proposal does not reflect the fundamental value of our portfolio and growth opportunities," said Northern Star Resources in a statement rejecting the initial offer.
The initial deal proposed that Northern Star investors would hold roughly a one-third stake in the combined miner, but operational misfires and a 25% drop in bullion prices from their January peak created valuation hurdles.
Gold Fields stated that combining the operations could unlock potential synergies of up to $5 billion.
Following the announcement, the share price of Northern Star Resources stood at $23.29.
The combined company would generate an estimated annual output of 4.1 million ounces of gold, with over half produced from a cluster of mines in Western Australia.
Gold Fields previously saw its shares fall 12% in Johannesburg following the deal's rejection before making a partial recovery, while deliberations on the revised cash offer remain at an early stage.
