Analysts questioned the timing of the deal and whether it was driven by competing corporate interest.Hemi’s scale means it had long been touted as a takeover target and has often been linked to gold majors including Newmont, Barrick Gold (TSX: ABX) and Agnico Eagle Mines (TSX: AEM).In late September, The Australian reported De Grey had received a takeover proposal from Agnico Eagle. De Grey said at the time that the report was incorrect and dismissed it as “pure speculation”. On Monday, Jardine said there had been no formal process. “We’ve obviously spoken with a range of parties over a range of things over a long period of time, but to be clear, we haven’t been running a sale process.”One shareholder staying quiet on its intentions is Gold Road Resources (ASX: GOR), which holds 17% of De Grey.Jardine described Gold Road as supportive.“De Grey’s relationship with Gold Road is arm’s length and as a major shareholder. Gold Road is aware of the transaction, and obviously it will be up to them to consider their approach from here,” he said.RBC expects Gold Road to accept the bid.“While Gold Road may prefer a deal with a greater cash component, Northern Star’s ASX listing still would offer Gold Road and its shareholders a liquid realization of value,” Barkley said.Bell Potter Securities analyst David Coates suggested Gold Road may hold out for a higher offer.“While the implied valuation of De Grey is solid, we would not rule out a competing bid from one of the world’s largest gold producers (Gold Fields, Barrick, Newmont),” he said. “We have long said ‘this is an asset the world’s largest gold miners can’t afford not to own’.”
GOR Price at posting:
$2.00 Sentiment: Buy Disclosure: Held
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