Gold Road Resources does not plan to improve a takeover bid for Western Australia gold explorer Apollo Consolidated after Ramelius Resources trumped its initial offer.
Earlier this month, Ramelius surpassed Gold Road’s $166 million offer of Apollo, pledging $181 million – a 10.7 per cent premium on Gold Road’s proposal.
Ramelius was first to make an offer for Apollo in mid-October, putting an initial proposal of $163 million on the table, or $0.56 per share.
Gold Road responded with a $166 million bid for the company, to which Ramelius rose to its current offer.
“In response to the improved Ramelius offer, Gold Road advises that it does not intend to improve the $0.56 cash per Apollo share consideration offered under its unconditional off-market takeover offer for Apollo, nor to vary the offer by extending the offer period,” Gold Road said in a statement.
Ramelius’ $181 million offer is unconditional and unanimously recommended by the Apollo board and would result in a 19.9 per cent interest in Apollo.
The company would become the owner of the Lake Rebecca gold project in Western Australia if the takeover is completed.
Lake Rebecca contains a mineral resource estimate of 29.1 million tonnes at 1.2 grams per tonne for 1.1 million ounces.
This will enable Ramelius to develop a new production centre in Western Australia once Lake Rebecca is developed.
Gold Road has yet to decide what it intends to do in relation to its 19.9 per cent shareholding interest in Apollo, which represents approximately 58 million shares.
The company has the option to not accept Ramelius’ superior offer and take no further action, accept its shareholding interest into Ramelius’ superior offer, or dispose of its shareholding interest entirely.
Gold Road has dispatched both the original bidder’s statement connected to its $166 million offer in October and its supplementary bidder’s statement.
The company advises Apollo shareholders to read both bidder’s statements together. Gold Road’s offer is open until 7pm Sydney time on December 8.