Gold Fields (NYSE:GFI) has completed its AU$3.7 billion purchase of Gold Road Resources.
Gold Road rejected Gold Fields’ first acquisition proposal in March, saying it undervalued the company.
Following negotiations between the two parties, Gold Fields, through its wholly owned entity Gruyere Holdings, entered into a scheme implementation deed with Gold Road on May 5. Under the AU$3.7 billion deal, the companies agreed that Gold Road shareholders would receive fixed cash consideration of AU$2.52 per share.
‘The Scheme provides Gold Road shareholders with an opportunity to realise certain value for their Gold Road shares at a compelling premium,” said Gold Road Managing Director and CEO Duncan Gibbs at the time.
“This offer price represents a material premium to the undisturbed share price prior to the initial Gold Fields’ proposal and a material premium to longer term trading levels,’ he added.
Under the deal, Gold Fields will gain a 100 percent interest in the Gruyere project in Western Australia.
Gruyere, which the companies previously worked on together as a joint venture, currently holds an open-pit mineral resource of 6.04 million ounces, and ore reserves of 3.67 million ounces.
Its average annual gold production stands at at 350,000 ounces.
According to Gold Fields, all Gold Road shares are now owned by Gruyere Holdings. Following the scheme’s implementation, Gold Road is expected to apply to delist from the Australian Securities Exchange.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.