PERTH (miningweekly.com) – Takeover target Gascoyne Resources has again urged shareholders not to take any action with regard to a takeover offer from fellow listed Westgold Resources, despite determining that this offer was superior to the Firefly proposal.

Westgold’s takeover offer for Gascoyne officially opened on Friday, under which Westgold is offering one of its own shares for every four Gascoyne shares held. In the event that the company obtains a shareholding of at least 50.1% in Gascoyne, this offer would increase to three Westgold shares for every eleven Gascoyne shares held.

However, the Westgold offer was subject to a merger agreement between Gascoyne and fellow listed Firefly Resources, which was announced in June this year and would see Firely shareholders receive 0.34 Gascoyne shares for each Firefly share held, not proceeding.

Gascoyne told shareholders on Friday that Westgold’s increased offer would offer a superior value to Gascoyne shareholders, if it could be completed. However, the company noted that its scheme implementation deed with Firefly did not contain a termination right for Gascoyne in the event that the company received a competing proposal and assessed that the proposal was superior to the Firefly scheme.

Gascoyne said that it had been in contact with Firefly to enquire whether that company would exercise its right to terminate the scheme implementation agreement, should the Gascoyne board determine that the Westgold offer was superior, but Firefly has declined to confirm this.

Westgold has applied to the Australian Takeovers Panel to have a termination right for Gascoyne included in its agreement with Firefly, but the Takeovers Panel declined to conduct proceedings. An appeal to this decision was lodged, and again the Panel declined to conduct proceedings.

A court hearing to consider the approval of the Firefly scheme implementation deed is scheduled for November 1.

Westgold’s offer for Gascoyne will expire on November 29, unless extended or withdrawn.