Australia's Westgold Resources offers to buy smaller rival Gascoyne for $75 million
(Reuters) - Australian gold explorer Westgold Resources Ltd said on Thursday it intended to buy Gascoyne Resources Ltd for A$104.8 million ($75.3 million), offering an alternative to the smaller rival’s merger plans with Firefly Resources.
Gascoyne in June (here) had announced a A$44.7 million merger with gold explorer Firefly Resources, which would combine the two company's assets in Murchison region of Western Australia.
Westgold, which is offering Gascoyne’s shareholders A$0.4175 per share - a 34.7% premium to its last close - said its proposal is subject to Gascoyne’s merger with Firefly not proceeding.
“Gascoyne shareholders have a superior financial and technical proposal that delivers a premium for their stock,” Westgold Executive Director Wayne Bramwell said.
Gascoyne in a separate filing said it was “not yet in a position to make a formal recommendation to shareholders”, and advised its shareholders to take no action.
Gascoyne shares soared 25% to A$0.39, their biggest intraday jump since December 2018, while Westgold shares declined nearly 4%, as at 0040 GMT.
($1 = 1.39 Australian dollars