139-year-old South African gold miner doubles down on R445 billion deal for Australian giant

South African gold mining giant Gold Fields has said it intends to press on with its proposed takeover of Australian miner Northern Star Resources.

This comes after the board of Northern Star unanimously rejected Gold Fields’ offer to acquire 100% of its shares, valued at AU$38.7 billion (R445 billion).

Gold Fields submitted a proposal to Northern Star on 13 September 2026, following a number of discussions between the two companies over the prior six months.

Under the proposed transaction, Northern Star’s shareholders would receive 0.3125 Gold Fields shares and AU$7.25 (R83.27) in cash for every Northern Star share held.

This implied an offer price of AU$27 (R310.11) per Northern Star share as of 13 September, with Northern Star shareholders set to own 33% of Gold Fields’ issued ordinary shares.

The deal would create the world’s second-largest gold producer, with an estimated annual output of 4.1 million ounces of gold.

In a response letter sent to Gold Fields on 24 September, Northern Star’s board said it was “not appropriate to engage in further discussions at this time.”

The board said the proposed deal materially undervalued Northern Star and would expose the company’s shareholders to significant jurisdictional and operational risks.

They also described the deal as opportunistic and said several of the requirements were onerous, such as a request for a period of hard exclusivity with no fiduciary out.

The rejection saw Gold Fields’ share price fall as much as 15% in a single day, with the company’s year-to-date share price now down 17.23% at the time of writing.

Despite this, Gold Fields CEO Mike Fraser said the company would continue to engage with Northern Star on the proposed acquisition.

“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,” Fraser said.

“But we remain open to constructive dialogue and continue to seek engagement with the Northern Star board to discuss the merits of the proposed transaction.”

Gold Fields goes hostile

Gold Fields’ decision to publicly disclose the details of the proposed takeover has been seen as an attempt to appeal directly to Northern Star’s shareholders.

This is indicative of a possible hostile takeover, with Gold Fields seemingly attempting to bypass the Northern Star board in its bid to acquire the Australian company.

But while Gold Fields has described the deal as beneficial for both sets of shareholders, Miningmx Editor David McKay said the pros still remain largely one-sided.

“At the right price, it’s a great deal for the shareholders in Gold Fields,” McKay said. “But price is the critical element, as ever, in this.”

“For shareholders in Northern Star, the concerns on their side are two, really. One is that Gold Fields has come in with Northern Star at a bit of an ebb.”

Northern Star is currently operating without a full-time CEO, with Glencore industrial lead Suresh Vadnagra set to take over the position on 5 October.

Additionally, McKay described the company’s hedgebook as “ruinous”, with it currently being US$1.5 billion (R24.36 billion) underwater and requiring substantial effort to fix.

Gold Fields’ decision to then propose an acquisition of Northern Star during this period of heightened uncertainty was seen by the board as highly opportunistic.

“They would feel that whatever Gold Fields is offering, it’s not true value,” McKay said. “They’ve almost come in whilst Northern Star is on its knees.”

“The other issue is that the offer comprises some cash and some shares. With that, Northern Star shareholders would feel they are getting jurisdictional risk in Gold Fields.”

McKay pointed to Gold Fields’ operations in Ghana, where it is awaiting a renewed mining permit for its Tarkwa mine from the Ghanaian government.

But while McKay believes the rejection from the Northern Star board is a firm refusal rather than a negotiation tactic, he said the decision will ultimately still lie with the shareholders.

One of these is American firm Elliott Investment Management, which owns a 6.24% stake in Northern Star valued at around US$2 billion (R32.8 billion).

Known in the market as an activist investor, Elliott has recommended that Northern Star engage in open discussions with Gold Fields and consider its proposal.