Avoca Resources has slammed Dioro Exploration for making “unrealistic statements” ahead of its proposed takeover and says the company needs a “reality check” over the high valuation of its shares.
Dioro’s target statement recently valued its shares around 180% higher than the company’s current share price, which Avoca has criticised as “not fair and not reasonable”.
Independent expert KPMG valued each Dioro share at $1.88 on a preferred basis in May; however, Dioro last traded at 66 cents, representing a further 2% drop since Monday.
In its formal response to Dioro’s target statement, Avoca said that target directors “must have difficulty believing the KPMG valuation is the fair market value of a Dioro share”.
“This is 376 per cent greater than Dioro’s pre-announcement closing share price and is out of touch with reality”, Avoca said in a statement.
Avoca is urging shareholders to “critically examine” arguments from Dioro’s board, which it says are “at best unrealistic”.
Dioro has recommended shareholders reject Avoca’s offer, which is scheduled to close on July 14.