Gold explorer Alto Metals (ASX: AME) will consider its response to an unsolicited all-cash takeover offer by Goldsea Australia Mining Pty Ltd, an Australian wholly-owned subsidiary of Shandong Goldsea Group Co Ltd.
Goldsea last week announced its intention to acquire all of the issued ordinary shares in Alto for $0.065 cash per share.
The offer values Alto at approximately $20.70 million.
Alto said it would consider the offer, taking into account a due diligence condition to confirm an existing mineral resource on the Sandstone gold project, 600km north of Perth and an environmental review.
Also required will be a sanction from the Foreign Investment Review Board; minimum acceptance of at least 90% of Alto shares; and other regulatory approvals.
The company has advised shareholders to take no action, and await the board’s target statement for a formal recommendation.
Goldsea Group is a privately owned diversified operating business and currently operates three underground gold mines in China.
The offer does not require Chinese government approvals.
Alto has appointed Longreach Capital as financial adviser and HWL Ebsworth Lawyers as legal adviser in relation to the offer.
Goldsea’s takeover bid has been labelled a “compelling opportunity for Alto shareholders to realise certainty of value”.
The offer price reflects a 93% premium to the one-month volume weighted average price of $0.034 per Alto share.
It also represents a premium of 81% to Alto’s capital raising price of $0.036 per share recorded in May.
Goldsea presented its offer directly to Alto shareholders following unsuccessful attempts to engage with Alto’s board on a recommended asset level transaction for Sandstone.
If successful, the takeover would enable the consolidation of the Sandstone project within Goldsea’s mining portfolio.