“There’s been a lot of market commentary that looks at that transaction in a binary light – either we accept the Northern Star proposal or we don’t. It’s still possible that another party could walk through the door and offer us a better price than Northern Star is offering,” Gibbs said.
Northern Star’s proposed takeover of De Grey – the highest for an undeveloped gold project in Australia – will go to a shareholder vote on April 16.
“The attempt to force Gold Road’s hand is a high-stakes gamble that does not have a high probability of success,” wrote Jefferies analyst Mitch Ryan in a note to clients.
“We are perplexed by Gold Fields’s motivation for publicly attacking its partner,” he said, hypothesising that the move was aimed at enticing a third party with interests in De Grey to bid for Gold Road, vote down Northern Star’s $5 billion offer and then sell the Gruyere stake to Gold Fields. “A low probability outcome, in our opinion,” he said.
Gold Fields has been contacted for comment.
“Our fundamental concern here is around value. It’s not a lack of willingness to engage, but the proposal does not even represent the value of the greater open pit reserve at any reasonable gold price,” said Gibbs. “It’s with Gold Fields to come back with a value proposal.”
Cheers
These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.
GOR Price at posting:
$2.82 Sentiment: None Disclosure: Not Held
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