Dioro Exploration has urged shareholders to reject a sweetened takeover offer from Avoca Resources, adding it had entered into confidential negotiations with third parties.
Last week, Avoca increased its all-scrip offer from 2.82 of its shares to 2.4 shares for every Dioro share.
Two of Dioro's major stakeholders have accepted the deal, totalling 14.95 per cent, however the target today pointed out that Avoca has received acceptances from other shareholders of less than 1 per cent.
Avoca currently has a relevant interest of 15.79 per cent in Dioro.
In addition, Dioro major shareholder, Baker Steel - which agreed to sell 2.47 per cent of its shares to Avoca - has increased its shareholding in the target to 10.87 per cent.
Dioro said the higher Avoca offer was opportunistic and not in the best interest of shareholders.
Meantime, Dioro added that it has held talks with third parties that could potentially result in a superior offer to shareholders.
"The Directors confirm that, since the date of the Second Supplementary Target's Statement, they have continued to advance discussions with various parties," Dioro said.
"Dioro has received a number of 'Expressions of Interest' from third parties, entered into confidentiality agreements covering all aspects of the negotiations, provided access to technical data about Dioro and conducted site visits at Dioro's operations."
Dioro added the talks may not result in an offer before the close of the Avoca bid, which is scheduled for July 21.
Dioro is still standing by independent expert KPMG's assessment of the preferred value of the company's shares of $1.88.
Shares in Dioro were up four cents to 71c while shares in Avoca crept up 1.5c to $1.725 at 10:48 AEST.
