Tietto shares jump after call to reject takeover bid

The news: Tietto Minerals has called on shareholders to reject a $629 million off-market takeover bid by Hong Kong's Zhaojin Mining.

The numbers: On 30 October, Zhaojin announced an unsolicited, conditional off-market takeover bid to acquire all the shares in ASX-listed Tietto Minerals that it doesn't already own or control, with an offer of $0.58 cash per Tietto share. In a Target's Statement released this morning, the Perth-based mineral exploration company urged shareholders to reject the offer, noting that an independent expert had assessed the value of Tietto shares to be in the range of $0.79-$0.93 per share, a premium of 36%-59% to the offer. The statement also confirmed that two of its major shareholders, Chifeng Jilong Gold Mining Co and Kongwell Management Ltd, which hold approximately 18.73% of shares in Tietto, do not intend to accept the bid.

The context: Among the reasons why Tietto Minerals is asking shareholders to reject the bid is that the offer is considered "opportunistically timed", after a slower ramp-up at the company’s Abujar gold mine in Côte d’Ivoire in the first half of the last financial year. Meanwhile, any takeover by Hong Kong Stock Exchange-listed Zhaojin Mining would require approval by China’s National Development and Reform Commission and Ministry of Commerce, plus Côte d’Ivoire’s Ministry of Mines, Petroleum and Energy.