Gold major Northern Star rejects new investor proposal to sell the company
Australia’s biggest gold miner Northern Star Resources has rejected a proposal by activist investor Elliott Investment Management to sell off some of its smaller assets or seek to sell itself to a bigger miner.
Elliott, which recently acquired a 3% to 4% stake in the miner, had called for a strategic review of the business, including a possible sale. The proposal came after Northern Star cut guidance multiple times over the past year as it underperformed peers owing to operational problems at its processing mill in Kalgoorlie.
“With reference to Elliott’s suggestion that the board should run a sale process for the company, we do not consider that this is the right time to do so,” Northern Star chairperson Michael Chaney said in a letter to shareholders on Wednesday.
The company has previously received interest for takeovers and mergers, but discussions did not proceed as offers were not in the shareholders’ best interests, he said.
“We had investment banks propose a spin-off of assets and we separately had our financial adviser review those options,” Chaney added. “For now, we are comfortable holding the assets we do but this is a matter that will remain under regular review.”
Elliott’s campaign to refresh Northern Star’s board and conduct a review came just days after CEO Stuart Tonkin announced he would step down in the coming months after nearly a decade in the role.
A search for a new CEO is underway, though the firm’s ability to attract talent has been overshadowed by recent performance issues and Elliott’s campaign.
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