West African gold producer Tietto Minerals (ASX:TIE) continues to fend off a takeover bid from its second-largest shareholder, China-based Zhaojin Capital, who has just extended the offer period for a second time.
Zhaojin’s offer was initially set to expire on 14 December 2023, but the Chinese company on 6 December extended the offer period to 12 January 2024.
Now, Zhaojin has once more extended the offer period, this time to 9 February 2024.
Zhaojin Chairman Jiang Guipeng has urged Tietto shareholders to accept the deal, but Tietto’s board has told shareholders to reject the offer, which it claims ‘materially undervalues’ the company.
Tietto first received the non-binding offer in late October 2023, with Zhaojin offering $0.58 per share to take full control of Tietto through an off-market takeover arrangement. At the time, Zhaojin held a 7.02% interest in Tietto.
Immediately prior to receiving the offer, Tietto shares were trading at $0.425 — meaning the Zhaojin bid offered a neat premium of some 36% to Tietto shareholders. The bid requires a minimum 50.1% acceptance.
However, Tietto on 3 November advised shareholders to reject the offer, claiming the premium price did not take into account the improving performance of Tietto’s flagship Abujar Gold Project in Cote d’Ivoire, West Africa, which reached full production in March last year.
With gold production ramping up and a Definitive Feasibility Study (DFS) for the company’s second mine just south of Abujar slated for early 2024, Tietto maintained that its share price would continue to reflect its improving performance in West Africa.
Shares in Tietto are trading at $0.60 as of 2:25pm AEDT on 4 January 2024.
Tietto shareholders now have until 9 February to accept the offer before it lapses, although Zhaojin can extend the offer even further if it desires.
Write to Joshua Smith at Mining.com.au
Images: Tietto Minerals
