Australia’s top gold producer Northern Star Resources said it rejected an unsolicited A$38.7 billion ($27.1 billion) takeover proposal from South Africa’s Gold Fields, the latest sign of consolidation pressure in the gold sector.

A successful bid for Northern Star would rank among the largest-ever takeovers of an Australian company and comes after a rally in gold prices to record highs at the start of the year has fizzled out.

The Perth-based miner has been the target of a campaign by activist investor Elliott Investment Management, which in June urged Northern Star to conduct a strategic review that it said could result in a sale to a rival such as Gold Fields. Shares of Northern Star rose 10.6% to A$24.46 in early trading on Monday, the highest level since August 28, but below the implied offer price.

Under the offer, Northern Star shareholders would have received 0.3125 new Gold Fields shares and A$7.25 in cash for each Northern Star Northern Star said it had received the proposed offer from Gold Fields on September 14, which was worth A$27.00 a share at the time, but the value had since fallen to A$25.19 based on the South African miner’s closing price on Friday.

Under the offer, Northern Star shareholders would have received 0.3125 new Gold Fields shares and A$7.25 in cash for each Northern Star Northern Star said it had received the proposed offer from Gold Fields on September 14, which was worth A$27.00 a share at the time, but the value had since fallen to A$25.19 based on the South African miner’s closing price on Friday.

That would represent a 14% premium to Northern Star’s last closing price, whereas Australian corporate takeovers typically need a premium of at least 30% for deals to proceed.

“Gold Fields has sought to acquire one of the world’s premier gold portfolios at a price that falls well short of what the Board considers to be its fundamental value and at a highly opportunistic time,” Northern Star Chairman Michael Chaney said in a statement.

Northern Star appointed a new chief executive in July under pressure from Elliott, which said last month it held about 5.6% of the miner.

Elliott Partner John Pike said in a statement on Monday that the investor believed there was immense potential for value creation at Northern Star, which any transaction would need to reflect.

“But others clearly see the value here too, and we think the Board has an obligation to engage with any serious buyer and fully evaluate the best path to deliver on that potential,” he said.

Gold Fields did not have an immediate comment. BOTH ACTIVE IN WESTERN AUSTRALIA Both miners have gold operations in Western Australia, including around the town of Kalgoorlie where Northern Star runs Australia’s biggest gold mine, Kalgoorlie Consolidated Gold Mines, known locally as the Super Pit.

For Gold Fields, the deal would boost its exposure to longer-life assets and the potential to share local infrastructure and expertise. It expanded its Australian footprint with the A$3.7 billion acquisition of Gold Road Resources in 2025, securing full ownership of the Gruyere gold mine in Western Australia.

“This bid feels opportunistic and (we) would agree with the board in rejecting it,” said John Ayoub, a portfolio manager at Wilson Asset Management, which holds Northern Star shares. “One needs to consider the value of the acquirers’ scrip vs the optionality (Northern Star) has in executing on the turnaround/divestment individual assets sales.” The Australian miner said Gold Fields’ proposal would have left shareholders with significant exposure to the South African miner’s stock, which it said carried a higher jurisdictional risk profile than Northern Star’s existing asset base.

Northern Star said the approach was also subject to several onerous conditions, including a request for a period of “hard” exclusivity.

The company also said the proposal materially undervalued its portfolio of long-life assets and was made ahead of key growth catalysts, including the commissioning and ramp-up of the Fimiston Mill.