Dioro Exploration shareholders have been advised to take no action after gold producer Avoca Resources sweetened its takeover offer on December 29 with a new offer valued at $115 million.
Dioro Exploration shareholders have been advised to take no action after gold producer Avoca Resources sweetened its takeover offer on December 29 with a new offer valued at $115 million.
Avoca has been locked in a tussle with Ramelius Resources since July 2009 to take over Dioro, which owns the Frog's Leg gold mine.
In August, Dioro declared its then 75.7 cents-a-share bid final. Ramelius came back in December with an increased scrip offer worth $1.155 a share, and further extending the offer until February 8.
Last week, Avoca returned to the tables with a cash and scrip bid worth $1.25 a share, declaring its bid final.
Under Australian corporations law neither of these offers can now be increased and the Ramelius amended offer cannot be extended further past the current closing date.
Avoca will offer investors 65 cents cash and 0.325 of its own shares for each Dioro unit, valued at $1.25 based on the closing share price of Avoca on December 24 2009.
But today, Dioro advised shareholders to take no action with the latest offer.
"Shareholders are reminded that the Dioro directors' current recommendation in relation to Ramelius' amended offer dated 18 December 2009 is also that shareholders should take no action in relation to this amended offer until they receive further recommendation from Dioro directors," the company said.
"Dioro shareholders will now have a choice of competing offers from Dioro's two largest shareholders Avoca and Ramelius, which between them hold in excess of 80 per cent of Dioro's issued share capital.
"Both offers will be unconditional, will be offering accelerated payment terms and are declared final."
Avoca already holds 44.85 per cent of Dioro's shares as well as three million options to acquire new Dioro shares.
Dioro will be issuing a second supplementary target's statement early this month in relation to the amended offers, outlining its recommendation.
Led by chief executive Rhod Grivas, Dioro is an integrated gold producer listed on the Australian Securities Exchange and Toronto Stock Exchange.
The company has a strategy to grow into a mid-tier gold producer through exploration and mergers and acquisitions.
In 12 months, Dioro has more than doubled its market capitalisation, commenced gold production on two fronts, increased its workforce to 140 and tripled its exploration acreage.
The Dioro statement is pasted below:
Dioro responds to Avoca's intention to make a new takover offer and Ramelius' amended offer
Dioro Exploration NL ("Dioro") advises that it has received notification of an intention to make a new takeover offer from Avoca Resources Limited ("Avoca").
Avoca's offer will comprise $0.65 cash and 0.325 Avoca shares for each Dioro share and is valued at $1.25 based on the closing share price of Avoca on 24 December 2009.
At this stage Dioro's shareholders are advised to TAKE NO ACTION in relation to Avoca's new offer or any document they receive relating to it until they receive the Dioro Directors' formal recommendation in relation to Avoca' new offer and Ramelius' Amended Offer.
Shareholders are reminded that the Dioro directors' current recommendation in relation to Ramelius' Amended Offer dated 18 December 2009 is also that shareholders should TAKE NO ACTION in relation to this Amended Offer until they receive further recommendation from Dioro Directors.
Dioro will be appointing an independent expert to consider the new Avoca offer and Directors intend keeping shareholders updated on further developments in a timely manner and will provide formal recommendations on both competing offers in due course.
Dioro shareholders will now have a choice of competing offers from Dioro's two largest shareholders Avoca and Ramelius which between them hold in excess of 80% of Dioro's issued share capital. Both offers will be unconditional, will be offering accelerated payment terms and are declared final.
Under Australian corporations law neither of these offers can now be increased and the Ramelius amended offer cannot be extended further past the current closing date. The Ramelius amended offer is the first offer to close on 8 February 2010, therefore Dioro shareholders do not need to make a hasty decision. The values of the Avoca new offer and the Ramelius amended offer both change with changes in the market prices of Avoca's and Ramelius shares.
Shareholders are reminded that Dioro's Annual General Meeting will be held on 29 January 2010 leaving sufficient time to accept either offer after the matters discussed and determined at the Annual General eeting are known.
In relation to Ramelius' amended offer, Dioro will be issuing a second supplementary target's statement in early January outlining the recommendation of the Dioro Independent Directors in relation to that amended offer, taking into account the change in circumstances since Ramelius announced its amended offer.
