Dioro rejects Ramelius takeover offer

Takeover target Dioro Exploration has recommended shareholders reject Ramelius Resources' offer, paving the way for rival bidder Avoca Resources to gain control.

In its second supplementary target's statement released today, Dioro said the Avoca offer was superior to the Ramelius offer on a market price valuation comparison.

As at Friday, Dioro said Ramelius' offer was valued at $1.249 while Avoca's was $1.272

Dioro also added that Ramelius' offer did not contain a cash component with shareholders to receive a sweetened 2.1 Ramelius shares for every Dioro share.

Avoca's offer, meanwhile, is offering 65 cents cash for each Dioro share and 0.325 Avoca shares for each Dioro share held.

In addition, Dioro said Avoca was in a stronger position that Ramelius in relation to their shareholdings.

Ramelius currently holds a 37.01 per cent interest while Avoca holds 44.85 per cent, which could increase to 46.6 per cent should Avoca choose to exercise 3 million options.

"It is of the opinion of the independent directors that Avoca is in a stronger position than Ramelius to become the controlling shareholder of Dioro .... given its existing interest in Dioro shares and options," the target said.

".... the independent directors consider that the new Avoca offer is more likely to be successful than the Ramelius amended offer."

Both bidders have declared their offers final, with the Avoca yet to open.