Gold Road Resources Ltd (ASX: GOR) is counting down its final days as a standalone company, with the $3.8 billion gold miner set to be absorbed into project partner Gold Fields Limited at the start of October.
On Monday, the shareholders of Gold Road voted overwhelmingly to accept a cash takeover bid from Gold Fields, and as a result, the company will be delisted from the ASX on October 1, while its shares are expected to be suspended as of the close of trade on the ASX on Friday, September 26.
This will free up a space in the S&P/ASX 200 Index (ASX: XJO) for a new company – Catapult Sports Ltd (ASX: CAT) – to enter, and is subject to a Supreme Court hearing to rubber-stamp the deal on Thursday.
So what do Gold Road shareholders have to do about all this? Well, nothing.
As Macquarie explains in a note to clients issued this week, Gold Road shareholders will be paid $2.52 in cash, including a 44-cent per share special dividend, plus a variable component linked to Gold Road's stake in fellow gold miner Northern Star Resources Ltd (ASX: NST)
That variable component will be worth about $1.02 per Gold Road share, Macquarie says.
Company documents filed with the ASX indicate that the special dividend will be paid on October 7 and the remainder of the cash on October 14.
Image source: Getty Images
Sweetened bid needed to sway the board
The takeover of Gold Road concludes a process that started in March, when Gold Fields made an initial offer of $2.27 cash per share plus an unspecified variable component for its stake in De Grey Mining, which was later taken over by Northern Star.
The Gold Road board at the time said it believed the offer "materially undervalues Gold Road and is highly opportunistic in nature''.
Gold Fields came back with an improved offer on May 2, which the board unanimously supported, subject to an independent expert's report.
The deal will consolidate ownership of the Gruyere gold mine in Western Australia, which is currently owned on a 50:50 basis by Gold Road and Gold Fields.
The mine is expected to produce between 310,000 and 320,000 ounces of gold this calendar year and has an expected mine life of more than 10 years.
The Gruyere deposit was discovered by Gold Road in 2013 and the company sold a half stake in the project to Gold Fields in 2016 for $350 million in cash plus a smelter royalty.
The project began construction in 2017 and first gold was delivered in the June 2019 quarter.
Gold Road shares are priced at $3.49 at the time of writing.
