Shares in Dioro Exploration have surged as it urges shareholders take no action on Ramelius Resources' $92 million all-scrip takeover bid, a higher offer to Avoca Resources' recommended proposal.
Late yesterday, Ramelius launched a surprise takeover bid for Dioro, a day after the target capitulated to Avoca's offer.
Ramelius is offering two of its shares for every Dioro share, a seemingly higher offer to that of Avoca's 2.3 shares.
"The Directors of Dioro, in conjunction with their corporate and legal advisors, are currently reviewing the announced terms of the Ramelius offer and will provide their recommendation in due course," Dioro said.
"On the basis of the implied value of the Ramelius offer, the Directors note that it may be superior to Avoca's amended offer."
Avoca's takeover offer is valued at around $70 million. The gold miner has a 22.32 per cent stake in Dioro and its offer is scheduled to close next Tuesday.
In a statement today, Avoca said it will not accept Ramelius' offer and due to its large shareholding, Dioro shareholders that accept the Ramelius bid will be denied capital gains tax relief.
Ramelius' offer is subject to conditions including a 50.1 per cent minimum acceptance level.
Ramelius has previously said the merger will bring together two of Australia's "most promising gold developers" into a single entity with assets in the eastern Goldfields.
Ramelius operates the Wattle Dam gold mine while Dioro holds a 49 per cent stake in the Frog's Leg gold mine and operates the South Kalgoorlie mine.
If Ramelius were to succeed in its takeover bid, Dioro shareholders would hold 45 per cent of the combined entity.
Shares in Dioro jumped 17 cents to a high of 87c before easing to 83.5c at 11:20 AEST. Ramelius shares dipped 0.5c to 49.5c while shares in Avoca climbed 9.5c to $1.72.