(Reuters) -Tietto Minerals said on Monday it received a takeover offer from Chinese gold miner Zhaojin Mining Industry to buy all shares it does not already own in the Australian gold explorer for about A$629 million ($398.79 million).
Shares of Tietto Minerals rose as much as 32.9% to A$0.565 in early trade, heading for their best day since March 26, 2020.
Under the offer, Zhaojin Capital, a unit of Zhaojin Mining which already owns 7.02% in Tietto, will acquire the remaining near 93% shares for A$0.58 per share, representing a 36.5% premium to the stock’s last close. The offer values the Australian gold explorer at A$655.4 million ($415 million).
Tietto, which produces gold from its Abujar project in Ivory Coast, said it would “carefully consider the indicative proposal and provide shareholders with their advice in due course”.
The acquisition will help Zhaojin Mining to expand its business overseas and boost profitability, the Chinese gold miner said in a statement.
Zhaojin Mining said subject to deal completion, it would support the development of Tietto’s Abujar gold mine and exploration activities in West Africa.
The offer, which has already been approved by Australia’s foreign investment review board, is subject to certain regulatory approvals and Zhaojin Mining getting at least 50.1% relevant interests in shares of Tietto.
The deal underscores rising interest in Australian resources firms, especially in battery metals companies, as lower valuations and cash needs make them attractive prospects for some of the world’s top miners.
($1 = 1.5773 Australian dollars)
(Reporting by John Biju in Bengaluru; Editing by Diane Craft, Lisa Shumaker and Subhranshu Sahu)
