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Gold Fields cannily leaves door open for $1bn Kirkland return -

Saturday, 19 November 2016

GOLD Fields cannily left the door open for the takeover of Kirkland Lake saying it remained interested in relaunching the transaction “… in the event that Kirkland Lake’s shareholders reject the Newmarket transaction”.

The South African group knows full well that not all Kirkland shareholders support its expansionary move for Newmarket Gold in a proposed C$1bn takeover.

According to Reuters, some Kirkland shareholders said they wanted the company to resume talks with Gold Fields, and another Canadian firm, Silver Standard which has joined Gold Fields in its bid for Kirkland. Shareholders argued that its company was too hasty in rejecting the Gold Fields/Silver Standard bid, recently sweetened to C$1.4bn ($1.04bn).

Instructively, shares in Kirkland were were down nearly 4% at C$7.65 after news Gold Fields and Silver Standard had withdrawn their bid. Results of the shareholder vote on Kirkland Lake’s potential deal to buy Newmarket, an Australian gold producer, are due on November 25, said Reuters.

Gold Fields and Silver Standard had made three successive bids for Kirkland which each time rejected the offers saying that its combination with Newmarket offered more value. It therefore said it would not engage with Gold Fields and Silver Standard and would not provide them with due diligence access.

“In light of the lack of engagement by the board of Kirkland Lake in response to these proposals, and there being no basis to expect any further engagement from Kirkland Lake, Gold Fields and Silver Standard are left with no choice but to withdraw their latest proposal,” said Gold Fields in an announcement on November 18.

“Gold Fields remains interested in pursuing negotiations toward a board-supported transaction with Kirkland Lake in the event that Kirkland Lake’s shareholders reject the Newmarket transaction,” it said.

Gold Fields has embarked on an aggressive hunt for new gold resources. It approved capital and operating expenditure of some $1.4bn for Damang, a mine it operates in Ghana. Weeks later it said it would buy 50% of the Gruyere gold project in Western Australia from gold development firm, Gold Road Resources for A$350m ($268m) with which it will form a joint venture company.

The project will cost an estimated A$507m ($389m) to build.

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