GFI Weighs Bolstering Bid for Northern Star Amid Premium Concerns

Gold Fields (GFI) is reportedly considering bolstering its bid for Northern Star. This development comes as some analysts suggest that the acquirer's premium against its own multiple will be a key factor in determining the success of the deal. Additionally, the structure of the bid, including whether it involves cash or scrip, may also play a significant role.

The source notes that scrip-heavy sweeteners have historically faced more resistance from target boards when the gold price is rising, as accepting paper means underwriting the acquirer's assets. This suggests that GFI may need to carefully consider its bid structure in order to win over Northern Star's board.

The fact that this is at the deliberation stage rather than a formal revised proposal indicates that a firm offer has not yet emerged, and it remains to be seen whether any rival interest will surface. The target board's posture on engagement will also be crucial in determining the outcome of these negotiations.