PERTH (miningweekly.com) – Takeover target DGO Gold has urged shareholders to accept the A$308-million takeover offer for fellow listed Gold Road Resources.

Gold Road earlier this month launched a takeover offer for DGO, offering 2.16 of its own share for every DGO share held.

The offer implied a price of A$3.55 for each DGO share held, representing a 20% premium over DGO’s last trading price, and a 28% premium over its ten-day volume weighted average price.

In its target statement on Thursday, DGO urged shareholders to accept the offer, saying it recognised the value of DGO’s portfolio, which the company felt was not reflected in its share price.

Executive chairperson Eduard Eshuys also pointed out that the Gold Road shares were more liquid than the DGO shares, and that the transaction would give DGO shareholders exposure to a larger and more diversified portfolio of high quality gold assets, while decreasing the funding risks to shareholders.

The directors of DGO have committed to accept the offer with respect to their own shares in the company, in the absence of a superior proposal.

The takeover offer is scheduled to open on May 9.

DGO owns a portfolio of strategic investments in ASX-listed companies De Grey Mining, Dacian Gold, and Yandal Resources, as well as a portfolio of exploration tenements in the Pilbara, Yilgarn, Bryah and Stuart Shelf provinces.

Gold Road previously said that the acquisition of DGO aligns with the company’s strategy to invest in high quality gold projects in tier one jurisdictions. In particular, Gold Road views the substantial shareholding in the owner of the high quality Hemi gold discovery, combined with its 50% 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, the company said.