Perseus plans alternate bid for Orecorp

The news: Things are heating up for takeover target Orecorp, after major shareholder Perseus Mining announced plans to top New York-listed Canadian miner Silvercorp Metals' takeover bid.

The numbers: Perseus said its off-market cash offer of $0.55 — to be officially lobbed by the end of the month — would represent a 4% premium to Silvercorp's bid of 19 cents and 0.0967 Silvercorp shares per Orecorp share. The new offer implies a value of $258 million for Orecorp. ORR shares fell slightly following the announcement, and were trading 0.9% lower at $0.525 by 1:20pm AEDT.

The context: Responding to Perseus' announcement, Orecorp said it had not changed its unanimous recommendation in favour of Silvercorp's offer, and that it did not consider the unsolicited bid to be a superior proposal.

As of mid-December, Perseus had increased its stake in Orecorp to roughly 19.9%, but Silvercorp needs only 50.1% acceptance to implement its off-market offer. Perseus pleaded with Orecorp shareholders to reject Silvercorp's offer, noting the latter's share price had fallen more than 18% since its December takeover bid. Perseus also claimed Silvercorp didn't have the funds to develop its Nyanzaga Gold Project.