Gold Road enters Apollo bidding ring

Gold Road Resources has stepped in to counter Ramelius Resources’ proposed takeover bid for Apollo Consolidated tabling an all-cash unconditional offer.

WA gold player Ramelius prepared a bid for Apollo and its Lake Rebecca project earlier this week, offering investors 56 cents for each share they held in a cash and scrip deal valuing the target at $163 million.

Gold Road, which already owns 19.9 per cent of Apollo, today stepped in to claim full ownership of the company with an all-cash proposal at 56 cents per share to combat Ramelius’ proposition.

Ramelius’ proposal comprised $0.34 in cash and 0.1375 in company shares for each Apollo share held, which Gold Road noted was more likely valued at 54 cents to reflect Ramelius' October 20 closing price. 

The new bid values Apollo at $166 million.

The West Perth-based gold producer says its submission represents a “superior” proposal to Ramelius conditional offer and several conditions are now “incapable of satisfaction” as a result of the counterbid.

A 90 per cent minimum acceptance would be required by Apollo stockholders for the Ramelius buy to proceed, while Gold Road says its offer can be accepted immediately after the offer period.

Apollo issued a statement to the ASX shortly after advising it had received a copy of the bidder’s statement and was consulting with its board to prepare a response.

As it stands, Apollo directors had unanimously recommended shareholders accept the Ramelius bid when it was announced on Tuesday.

According to Gold Road, the offer follows a period of prior engagement with Apollo regarding a potential transaction that has included due diligence access.

Gold Road plans to fund the acquisition with $116 million cash and term deposits.

Argonaut is acting as financial adviser and broker to the Gold Road offer, with King & Wood Mallesons acting as legal.

On the market, Gold Road shares are up 1.12 per cent and trading at $1.35.

Apollo shares have risen 10.38 per cent to 58 cents.

Ramelius shares are flat at $1.56.