The long running takeover war for Dioro Exploration is finally showing signs of abating, after the company’s directors yesterday rejected Ramelius Resources’ offer in favour of an impending bid from Avoca Resources.
Dioro has been in the sights of the two gold miners since July last year.
Avoca has been the frontrunner since then, after it acquired a 44.85% stake to become Dioro’s largest shareholder when its offer closed in August last year.
Ramelius launched its bid on 30 July last year and has since extended the deadline several times in an effort to match Avoca’s stake.
Ramelius is currently offering one share for every 2.1 Dioro shares, while Avoca had offered one share for every 2.3 Dioro shares. A statement from Ramelius, also issued yesterday, indicated the company had acquired a 37.01% stake in Dioro.
However, Avoca last week announced a second offer in an effort to take the remaining 5.16% it needs for majority holding.
Dioro’s independent directors urged shareholders to reject Ramelius’ bid in favour of the new Avoca offer, even though the latter is yet to open.
In a statement, the directors said the new Avoca offer contains a “significant cash component” of 65 cents per share, while Ramelius’ contains none.
In addition to this, Avoca’s $1.88 share price is currently superior to Ramelius’ 59 cents.
“Avoca is also in a stronger position than Ramelius to take effective control of Dioro,” the directors said.
“Dioro shareholders who accept the Ramelius offer will be unable to consider the new Avoca offer when it opens.”
Avoca hopes to merge its gold operations with Dioro’s and become a 270,000 ounce per annum producer.
The company’s chairman Robert Reynolds said the new offer presented a straight forward choice to Dioro shareholders.
“We believe there is a timely and significant opportunity to combine these two companies and create a commanding gold producer with a focus on Western Australian goldfields,” he said.