Australian gold mining company Northern Star Resources Ltd. has agreed to purchase De Grey Mining Ltd. for about 5 billion Australian dollars ($3.3 billion).
Northern Star will acquire all shares in the company, with De Grey shareholders to get 0.119 new Northern Star shares for each share held, implying an offer price of 2.08 Australian dollars per share. The offer price represents a 37.1% premium on De Gray's Friday share close of 1.52 Australian dollars. Northern Star shareholders are set to own 80.1% of the combined entity, with De Grey shareholders having the remaining 19.9%.
"The acquisition of De Grey is strongly aligned with Northern Star’s strategy and contributes to our purpose of generating superior returns for shareholders. De Grey's Hemi development project will deliver a low-cost, long-life and large-scale gold mine in the Tier-1 jurisdiction of Western Australia, enhancing the quality of Northern Star's asset portfolio to generate cash earnings," Northern Star's Managing Director and CEO Stuart Tonkin said.
