DGO Gold has tapped MST Marquee and Greenhill after receiving a $308m takeover proposal from the $1.4bn Australian listed gold miner Gold Road Resources, which is working with RBC Capital Markets and law firm Corrs Chambers Westgarth.
The offer was announced on Monday where DGO shareholders will receive 2.16 Gold Road shares for every DGO share, implying an offer price of $3.55 per share and implying an equity value of about $308m for DGO.
DGO’s shares last traded at $3.
The takeover bid has been recommended by DGO’s directors and comes with an 80 per cent minimum acceptance condition.
DGO owns a portfolio of prospective exploration and mining assets including a 14.4 per cent shareholding in the Australian listed miner De Grey Mining, which owns the 9 million ounce Mallina Gold Project in Western Australia.
It also owns a 6.8 per cent shareholding in the Australian listed Dacian Gold, which owns the Mt Morgans gold mine, and a 20.1 per cent holding in the Australian listed Yandal Resources, an exploration company focused on the Yandal Greenstone belt.
DGO also owns a portfolio of exploration tenements in the Pilbara, Yilgarn, Bryah and Stuart Shelf Provinces.
The deal comes amid a flurry of takeover talks amid various gold miners in Western Australia.
Gold Road said the offer represented a 28 per cent premium over the ten-day volume weighted average price of $2.77 for DGO shares and 37 per cent over 30 days.
Directors of the DGO board in the absence of a superior offer will vote their own shares towards the deal, which represents about 16 per cent of shares on issue.
Gold Road managing director Duncan Gibbs said that the acquisition of DGO aligned with Gold Road’s strategy to invest in high quality projects in tier one jurisdictions.
In particular, Gold Road viewed DGO’s substantial shareholding in De Grey, which provides exposure the high quality Hemi Gold Discovery, combined with its 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.
DGO Gold executive chairman Eduard Eshuys said the offer not only recognised and unlocked the company’s value but provided DGO shareholders with ongoing exposure to the assets and the Gold Road portfolio.
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