The Gold Road Resources Ltd (ASX: GOR) share price has jumped 15% after the gold company received a takeover offer.
Gold Road Resources is one of the larger gold mining businesses on the ASX. It has a mine, as well as exploration projects across Western Australia, South Australia and Queensland.
Takeover offer
The ASX gold miner noted that Gold Fields made a market announcement on 24 March 2025 and confirmed it had received, considered and subsequently rejected an “opportunistic, conditional and non-binding indicative proposal from Gold Fields”.
The offer was $2.27 cash per Gold Road Resources share for the entire business, plus a variable cash amount “equal to the proportionate value of each Gold Road shareholder’s interest in the shares that Gold Road holds” in De Grey Mining Limited (ASX: DEG).
After engaging with Gold Fields, the Gold Road board unanimously decided the offer “materially undervalues” Gold Road and is “highly opportunistic in nature”.
The Gold Road board noted the offer came following a lower production in the March 2025 quarter because of maintenance on the primary crusher and the failure of two conveyor belts. Gold Fields is the manager of the Gruyere joint venture.
The ASX gold share also said the offer appears to have been “opportunistically tabled by Gold Fields” in advance of the completion of exploration and studies into the potential underground expansion of the Gruyere mine. Gold Road suggested the offer “attributes no value at all to the potential underground expansion of the Gruyere mine”.
Due to that, the board decided to reject the offer on 14 March 2025.
Gold Road suggested an alternative proposal to acquire Gold Fields’ interest in the Gruyere joint venture, which was rejected by Gold Fields.
The ASX gold miner concluded:
Gold Road has engaged in active correspondence and dialogue with Gold Fields to consider whether Gold Fields would address the deficiencies of its Offer. Despite Gold Road’s engagement in good faith and willingness to maintain confidentiality, Gold Fields has elected not to address Gold Road’s concerns privately but rather to publicly announce the terms of its Offer despite our openness to engage. Gold Road views this behaviour of a joint venture partner, which Gold Road invited into Gruyere in 2017, as extremely disappointing.
Final thoughts on the Gold Road Resources share price
It’s not a great development that the two partners have seen their relationship sour. I’m not sure if a takeover will go ahead, but it’s alerted the market to the fact that the ASX gold share could be undervalued. We’ll have to see if there are any more offers in either direction.
After today’s rise, I’d probably look at other ASX shares first.
