Predictive Discovery Ltd (ASX: PDI) shares are rocketing on Wednesday morning.
At the time of writing, the ASX 300 gold stock is up 27% to 79.5 cents.
This follows news that a competing takeover offer has been tabled by Perseus Mining Ltd (ASX: PRU).
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ASX 300 gold stock rockets on takeover news
This morning, Predictive Discovery revealed that it has received an unsolicited proposal from Perseus Mining.
The gold miner wants to acquire all shares not already owned by it in exchange for 0.136 new Perseus shares per Predictive Discovery share.
Based on the Perseus Mining share price at yesterday's close, this values each Predictive Discovery share at 77.8 cents. This implies a fully diluted valuation of approximately $2.1 billion and represents a premium of 24.5% to its last close price on 2 December.
The ASX 300 gold stock notes that the proposal is superior to is planned merger with Robex Resources (ASX: RXR), which aimed to creates West Africa's next mid-tier gold producer. Robex shares are crashing 10% on the news today. Though, Robex has a five business day matching period to table a new proposal.
According to the release, Perseus Mining's offer will include a $37 million unsecured loan facility to be used for the purposes of paying any termination fee payable under the Robex arrangement agreement.
Perseus believes that the ASX 300 gold stock would be an excellent strategic fit and enhance its portfolio quality and African gold platform. It said:
Perseus's rationale for the Proposed Transaction is as follows: Excellent strategic fit: as Predictive's largest shareholder (17.8%), the transaction enhances Perseus's portfolio quality and the Company's African gold platform; Proven track record of delivery: Perseus is uniquely placed to de-risk, optimise and ultimately unlock the full potential of Predictive's Bankan Gold Project (Bankan) in Guinea, with its world class projects team currently executing a similar development at Nyanzaga; Enhanced growth profile: consistent with Perseus's M&A track record, this transaction is financially compelling and is expected to materially enhance earnings, cash flow and production going forward.
It then adds:
Significant scale & diversification: as one of the largest undeveloped gold projects in Africa, Bankan adds material ounces and mine life across a fifth jurisdiction, with its production of ~249koz1 adding to Perseus's existing production of 500-600koz per annum2 ; Strong financial position: Bankan and Nyanzaga to be funded via existing liquidity and cashflows with no change to capital management policy; Exploration potential: significant exploration potential in the Siguiri Basin, which can be accelerated and unlocked through Perseus's proven ability to extend mine life through exploration; and Potential value uplift: potential value uplift post transaction given enhanced scale, asset quality, longevity, jurisdictional diversification and de-risking of development.
