The board of Dioro Exploration has urged its shareholders to ignore Avoca Resources’ increased takeover offer until it can be fully evaluated, the company announced in a statement released to the Australian Securities Exchange.
“Your directors strongly recommend that Dioro shareholders take no action in response to Avoca’s first supplementary bidder’s statement until the Dioro board provides a formal recommendation,” the company said.
“The Dioro board will review the supplementary bidder’s statement and the revised offer and will respond in due course.”
On Monday Avoca increased its unsolicited offer to one of its shares for every 2.4 Dioro shares. This new offer is up from the one for every 2.82 shares that Avoca had originally offered and values Dioro at almost $0.75 cents per share, or around $50 million.
According to DJ Carmichael & Co resource analyst, Paul Adams, the latest Avoca bid will ultimately remain too low.
“Avoca has traction whatsoever with the original bid,” he told MINING DAILY
“The new bid is a step in the right direction, but at the end of the day I do not think it is going to be enough to persuade Dioro shareholders.
“DJ Carmichael had Dioro valued at $1.35 a share, so in terms of value, Avoca’s offer of $0.75 is pretty short of the mark.”