Gold Road Resources (ASX: GOR) has today released its bidder’s statement for the recommended, off-market takeover offer for DGO Gold (ASX: DGO).
Gold Road today also lodged the notice of meeting for its AGM, to be held in Perth on May 19.
The bidder’s statement details Gold Road’s offer, which has been unanimously recommended by the DGO board. Each DGO director intends to accept the offer in respect of all DGO shares they own and control (representing approximately 16% of DGO shares on issue), in each case in the absence of a Superior Proposal.
The all-scrip offer represents an attractive and significant implied premium for every DGO Share, implying an offer price of $3.55 per DGO Share and an equity value of approximately $308 million (on a partially diluted basis).
The Gold Road offer represents an attractive and significant implied premium for DGO shareholders at various volume weighted average share prices:
- 20% over the last trading day VWAP (prior to the announcement date) of $2.91 for DGO shares, at an implied offer price of $3.49 based on Gold Road’s last trading day VWAP;
- 28% over DGO’s 10-trading day VWAP of $2.77 for DGO shares, at an implied offer price of $3.55 based on Gold Road’s 10-day VWAP; and
- 37% over the 30-day VWAP of $2.60 for DGO shares, at an implied offer price of $3.56 based on Gold Road’s 30-day VWAP.
Under the Offer, DGO shareholders are provided an opportunity to obtain significantly elevated liquidity on their investments given the considerably higher trading liquidity of their resulting holding of Gold Road shares while realising an attractive and significant premium to the recent trading levels of DGO shares.
DGO shareholders will also gain immediate leverage to the gold price via Gold Road’s 50% interest in the high-quality Gruyere gold mine in WA’s north-eastern Goldfields, which is targeting production to a sustainable 350,000 ounces (100% basis) per annum from calendar year 2023. Gruyere’s mine life is greater than 10 years and is one of Australia’s largest gold mining operations.
In addition, DGO shareholders will gain exposure to Gold Road’s industry leading exploration strategy across its 100%-owned Yamarna tenements. Gold Road’s dividend policy offers shareholders an opportunity to benefit from future shareholder returns. Importantly, DGO shareholders will also continue to benefit from exposure to DGO’s current suite of assets after they are incorporated in the combined group.