PERTH (miningweekly.com) – Takeover target Alto Metals has urged shareholders not to take any action in relation to a takeover offer from the Australian subsidiary of Shandong Goldsea Group.

Goldsea earlier this week issued its bidder statement for the 6.5c-a-share all cash offer for each Alto share held.

The offer price represented a 103% premium to Alto’s last closing price on February 20, and a 93% premium to its one-month volume weighted average share price. The offer price also represented an 81% premium to Alto’s capital raising price in May of last year.

In its bidders statement, Goldsea noted that the share offer price presented Alto shareholders with the certainty of a ‘cash exit’ in an uncertain economic environment, given the global volatility in the capital markets related to Covid-19.

“We are convinced that our offers are a unique opportunity for Alto shareholders and Alto option holders. Now more than ever, given the recent market volatility. The offers provide certainty of value in an uncertain market at a genuinely attractive cash price for Alto shares and a cash offer for the unlisted Alto options,” said Goldsea chairperson Jianjun Li.

“For Goldsea, this is a logical step, in line with the group’s strategy, to bring the ownership of the Sandstone gold project within its portfolio. Given the nature of the Sandstone gold project exploration and potential restart, we believe the Sandstone project would be best placed being wholly-owned within a larger, diversified portfolio such as Goldsea’s.”

Alto’s Sandstone gold project, which is currently estimated to host some 261 000 oz of gold, is located in the East Murchison mineral field of Western Australia.

Alto on Wednesday urged shareholders not to take any action in relation to the bid.

The takeover target warned that some of the conditions imposed by the bid had already been breached, including the entry of a loan with Windsong Valley, which is associated with nonexecutive director Terry Wheeler.

The company also pointed out that overall, the conditions of the offer purported to dictate how the Alto board responded to the offer, and restricted the ability of the board to take routine actions in the ordinary course of business and project exploration.

Alto will now write to the Goldsea board to seek clarification around certain issues.