The De Grey Mining Limited (ASX: DEG) share price is taking off on Monday despite no news from the S&P/ASX 200 Index (ASX: XJO) gold developer.
Its strong performance sees it leading the index alongside the share price of its major shareholder, Gold Road Resources Ltd (ASX: GOR).
Speculation the latter ASX 200 gold stock could be considering a takeover bid for the former has emerged in recent weeks amid news of multiple major takeovers on the Aussie bourse.
At the time of writing, the De Grey Mining share price is trading 6.67% higher than its previous close at $1.12.
Meanwhile, the ASX 200 is up 0.45% and the S&P/ASX 200 Materials Index (ASX: XMJ) is the market's best-performing sector, gaining 3.59% today. At the same time, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is up 4.79%.
So, could a takeover bid be on the cards for De Grey Mining? Let's take a look.
Could this be bolstering the De Grey share price?
The De Grey Mining share price is launching higher today alongside that of its major shareholder and its home sector. Its gains also come amid what appears to be the season for takeovers.
Nitro Software Ltd (ASX: NTO), Perpetual Limited (ASX: PPT), and ReadyTech Holdings Ltd (ASX: RDY) have all been hit with acquisition offers in the last week. Tyro Payments Ltd (ASX: TYR) also recently confirmed it has been approached by multiple parties – including Westpac Banking Corp (ASX: WBC) – in search of a takeover.
And one happening in recent weeks appears to have fanned rumours De Grey Mining could be a takeover target too.
Speaking on whether Gold Road would nominate a director to De Grey's board last fortnight, CEO and managing director Duncan Gibbs commented, courtesy of The Australian:
I guess it's not abnormal for a company … that has a 20% position to have a board nominee.
[T]here are pros and cons to doing that and, at the moment, it's not something that we've approached De Grey about.
Gold Road inherited a 14.45% stake in De Grey through its acquisition of DGO Gold earlier this year. It has since bumped that up to 19.99%. At the time, the company commented:
At this stage, this shareholding is seen as a long-term investment and Gold Road does not intend to make a takeover bid or other offer for [De Grey], but Gold Road reserves its right to do so.
Some have reportedly noted Gold Road's hesitation to appoint a nominee to De Grey's board could indicate it's planning to post a takeover bid. Particularly as three De Grey board members have stepped down in recent months. However, such talk is pure speculation for the time being.
