The Gold Road Resources Ltd (ASX: GOR) share price has struggled this week, coming off a previous high of $1.405 last week.
However, Gold Road shares have moved into the green today, and are now changing hands at $1.34 each. That’s a 0.37% gain from the market open.
Here’s what we know from the gold producer’s camp today.
Gold Road steps up for takeover bid
Gold Road advised it had made an unconditional, off-market takeover bid to acquire all of the ordinary shares in Apollo it doesn’t already own.
The proposal comes just a few days after Ramelius Resources Limited (ASX: RMS) put forward a conditional cash and scrip offer of 34 cents plus an exchange ratio of 0.1375 Ramelius shares per Apollo share.
At the time, Apollo’s directors unanimously recommended its shareholders accept the offer.
However, Gold Road has since chimed in. It has proposed an all-cash consideration of 56 cents per share to acquire the company. This values Apollo at $166 million on a fully diluted share count basis.
Gold Road says the offer “represents a compelling opportunity for Apollo shareholders to realise certain and near-term value” compared to the Ramelius offer.
Gold Road’s is the superior offer on a cash-for-cash basis. This is because Remelius’ bid implies a total value of 55.4 cents per Apollo share.
In fact, the 56 cents per share on offer signified “the highest price ever paid for an Apollo share”, at the time of the release. However, it represents a roughly 2.5% discount to Apollo’s current price of 58.5 cents.
The release also notes that “several conditions of theirs (Ramelius’ offer) are now incapable of satisfaction”, due to the nature of Ramelius’ “highly conditional” offer.
As it stands, Apollo’s board has recommended its shareholders take no action in respect to the Gold Road offer, until they are able to make an informed decision based on both offers.
There is still a month remaining on the open interest of the Gold Road offer by legislature. That means Apollo shareholders “will have ample time to make a decision after they have received the target’s statement”.
Gold Road share price snapshot
The Gold Road share price has struggled this year to date, having posted a return of about 1% since January 1.
As such, it is in the red by around 9% in the last 12 months, well behind the S&P/ASX 200 index (ASX: XJO)’s climb of about 19% in that time.