Gold Road Resources has made a recommended off-market takeover offer to acquire all ordinary shares in DGO Gold.
Comprising 2.16 Gold Road shares for every DGO share, the bid implies an offer price of $3.55 per share which represents a 20 per cent premium to DGO’s last trading volume-weighted average price (VWAP) of $2.91.
Gold Road sees DGO’s shareholding in De Grey Mining (the owner of the nine-million-ounce Mallina gold project in Western Australia) as particularly enticing, along with its stake in other emerging gold companies Dacian Gold and Yandal Resources.
DGO also has its own portfolio of exploration tenements located in the Pilbara, Yilgarn, Bryah and Stuart Shelf provinces in WA and South Australia.
“The acquisition of DGO aligns with Gold Road’s strategy to invest in high-quality gold projects in Tier-1 jurisdictions,” Gold Road managing director and chief executive officer Duncan Gibbs said.
“In particular, Gold Road views the substantial shareholding in the owner of the high-quality Hemi gold discovery, combined with our 50 per cent ownership of the Gruyere gold mine, as an exciting opportunity to participate in two of the most significant gold discoveries in Western Australia this century.”
In the absence of any superior offer, DGO’s directors have unanimously recommended its shareholders accept the offer. Gold Road will require 80 per cent of DGO shareholders to approve the takeover for it to be successful.
DGO executive chairman Eduard Eshuys said the takeover offer represents a fantastic investor opportunity.
“DGO has consistently traded at a discount to the value of its assets, and this offer not only recognises and unlocks that value, but provides DGO shareholders with ongoing exposure to these assets and the Gold Road portfolio, as part of a more liquid investment in a cash flow generating ASX-200 gold producer.”
A bidder’s statement will be dispatched on or around April 8, with DGO shareholders able to accept the offer thereafter.
In November 2021, Gold Road was trumped by Ramelius Resources in its takeover bid for Apollo Consolidated after the two companies went back and forth with offers.
Ramelius surpassed Gold Road’s $166 million offer of Apollo, pledging $181 million – a 10.7 per cent premium on Gold Road’s proposal.