Shares in Bullabulling Gold (ASX: BAB, LON: BGL) shot up as the company revealed it has received a takeover offer from Norton Gold Fields (ASX: NGF).
Shareholders are invited to sit tight while the board considers the merits of the offer, which has been pitched at a price of 7 cents a share, a 30% premium to the closing share price of Bullabulling on the Australian Stock Exchange on 16 April.
“The Bullabulling Gold Project has significant funding challenges which a small company such as Bullabulling will have ongoing difficulties managing," claimed Dr Dianmin Chen, chief executive officer of Norton Gold Fields.
"By accepting the offer, Bullabulling shareholders will remove their exposure to these major financing risks and the likely continued dilution in the value of their shareholdings," he added.
Norton said shareholders representing 6.6% of the issued share capital of Bullabulling have already indicated their intention to accept the offer.
Norton has pounced on its fellow Aussie gold miner after Bullabulling started drilling at its namesake gold project in Western Australia earlier this month as it moves towards producing a definitive feasibility study.
Shares in Bullabulling rose 32% to 3.95p in London, valuing the company at about £13.5mln.
Broker Westhouse Securities, however, has a 17p price target on the stock.
*Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.*
Reported by Proactive Investors 2 hours ago.