The board of Tusker Gold has unanimously recommended its shareholders accept a takeover bid from Barrick Gold.
Barrick is offering 80 cents cash per share to acquire all of Tusker’s issued shares.
The bid represents a 90% premium on Tusker’s share price at the close of 29 January, which was the last trading day prior to the offer.
Barrick already owns 49% of Tusker’s flagship asset, the Nyanzaga gold project in Tanzania.
Indago Resources, Tusker’s controlling shareholder with a 67.5% stake, stands to earn up to $54 million before tax if the deal is completed.
The company has entered into pre-bid acceptance agreement to initially hand over 17.5% to Barrick for $14 million.
This will represent a 60% profit on the 22 cents per share Indago paid during the target’s initial public offer late last year.
In a statement released yesterday, Indago confirmed it would sell the remainder of its holdings, which represent a 50% stake, unless a superior proposal is presented.
Barrick has also entered into a similar pre-bid agreement with Blue Capital, which owns 2% of the target.
The bidder’s statement will be lodged with the Australian Securities and Investments Commission later this month.