dioro leaps as partner ponders bid

Dioro leaps as partner ponders bid

26th May 2009, 7:45 WST


Takeover target Dioro Exploration’s shares jumped to their highest level in nearly a year yesterday on mounting speculation its joint venture partner, La Mancha, was preparing a rival bid.

Dioro’s shares firmed 4 per cent, or 2.5¢, to 66¢, widening the valuation gap to Avoca Resources’ hostile scrip bid which prices the target at 60.6¢. It was Dioro’s highest close since July.

There is increased speculation that Toronto-listed La Mancha is planning a bid for Dioro in order to consolidate ownership of the high-grade Frog’s Leg gold mine north of Coolgardie.

La Mancha owns 51 per cent of Frog’s Leg and Dioro 49 per cent. Dioro also owns a mill and last week struck a toll-treatment deal with La Mancha covering 100 per cent of the ore from Frog’s Leg.

Dioro is expected to release its target statement next week in response to Avoca’s bid. It is expected to urge shareholders to reject the bid.

KPMG Corporate Finance has been asked to prepare an independent expert’s report for Dioro.

PETER KLINGER



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