Avoca Resources has accused Dioro Exploration of “questionable tactics” for entering a trading halt last Friday and forcing it to extend its takeover offer by an extra week.
Dioro requested the halt pending an increase in reserves at its 49% owned Frog’s Leg gold project, announcing yesterday that proven and probable ore reserves have grown 45% to 789,504 ounces.
According to Avoca, the trading halt was unnecessary because Dioro had already disclosed the results in its Target’s Statement released to the Australian Securities Exchange (ASX) on May 29.
“Avoca does not believe that Dioro’s increase in reserves is new information and therefore it does not justify going into trading halt,” Avoca said in a statement to the ASX.
Due to the trading halt Avoca has been forced to extend the length of its offer, which was to expire today.
“In order to enable Dioro shareholders to digest the information still to be released by Dioro, and to have an opportunity to accept Avoca’s offer, Avoca has extended the offer period under its unconditional takeover offer by one week,” Avoca said.
DJ Carmichael resource analyst Paul Adams told MINING DAILY that Dioro’s tactics are not surprising given the protracted nature of the attempted takeover.
“When it gets to this stage of mergers and acquisitions managing directors on either side do not pull any punches,” he said.
“It is all about winning the minds of the Dioro shareholders.”
According to Adams, despite Dioro’s statements about talks with third parties regarding alternate offers, the halt may have been an attempt to increase its price in the absence of another serious bidder.
“The halt may be an effort to try and solicit the highest price possible if there is not a white knight,” he said.
“It is one thing to talk to a third party, but quite another coming up with a deal with a third party.”