S&P/ASX 200 Index (ASX: XJO) gold stock Gold Road Resources Ltd (ASX: GOR) believes it is worth significantly more than $3.3 billion.
That's the value of the takeover bid from South Africa's Gold Fields Ltd (JSE: GFI).
And the Gold Road share price is surging on the rejection news. Shares in the Aussie gold miner are up 9.8% in morning trade on Tuesday at $2.69 apiece. That sees the Gold Road share price up 72% since this time last year.
What takeover offer was proposed?
Gold Fields offered to acquire the ASX 200 gold stock for a cash consideration of $3.05 per share as of 7 March. That comprised a fixed portion of $2.27 per Gold Road share (15% below the current price) plus a variable portion equal to the value of each shareholder's proportion of Gold Road's shareholding in De Grey Mining Ltd (ASX: DEG).
Gold Road counts as the biggest shareholder in De Grey.
Gold Road and Gold Fields are 50/50 joint venture owners of the low-cost, long-life Gruyere gold mine, located in Western Australia. The Gruyere mine is operated by Gold Fields, and the South African miner was hoping to consolidate its ownership with the $3.3 billion takeover bid.
But that's not to be.
ASX 200 gold stock rejects offer as inadequate
In an update released after market close on Monday, Gold Road's board soundly rejected the takeover bid as "highly opportunistic".
The ASX 200 gold stock stated:
After careful consideration and engagement with Gold Fields, the Gold Road board unanimously formed the view that the offer materially under values Gold Road and is highly opportunistic in nature.
Gold Road notes that the receipt of the offer coincided with a lower March 2025 quarter production due to maintenance on the primary crusher and the failure of two conveyor belts.
After the completion of extension exploration studies at Gruyere, Gold Road added that the takeover offer "attributes no value at all to the potential underground expansion of the Gruyere mine".
The ASX 200 gold stock revealed that it had made an alternate proposal. One which would see it acquire Gold Fields' 50% interest in the Gruyere JV. However, this offer was turned down by Gold Fields.
Commenting on the rejected takeover offer, Mike Fraser, CEO of Gold Fields, said: "We believe our proposal represents a compelling opportunity for Gold Road shareholders to realise an attractive and certain cash price for their investment."
Fraser added:
We are disappointed that Gold Road's board of directors has rejected our proposal. Gold Fields will continue to seek the engagement of the Gold Road board to consider the merits of the proposed acquisition and to advance the proposal.
