Ignore takeover bid, Dioro

Avoca Resources has launched an unsolicited $49 million takeover bid for rival Dioro Exploration.

Dioro Exploration’s managing director Rhod Grivas has advised the company’s shareholders to take no action in relation to Avoca Resources takeover bid.

“Avoca’s offer is unsolicited and proposes to offer Avoca shares for Dioro shares,” Grivas said in an announcement to the Australian Securities Exchange.

Yesterday, Avoca launched a $49 million takeover bid for its smaller rival.

The bid included one Avoca share for every 2.82 Dioro shares, effectively valuing Dioro at approximately 53 cents per share.

Avoca has already entered into unconditional share purchase agreements with Harmony Gold and Baker Steel Capital Managers for 14.95% of Dioro’s share registry.

That equity represents all of Harmony’s 12.48% interest, held through its subsidiaries New Hampton Goldfields and South Kal Mines, plus a 2.47% interest that Baker Steel holds out of a total 10.47% interest.

Avoca is unable to acquire more than 15% of the company at this stage without being required to go through the FIRB approval process.

Avoca is viewed as a foreign entity in light of its 19.72% major shareholder Pala Investments Holdings, a Channel Islands-domiciled mining investment fund.

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