- Musgrave Minerals’ (MGV) board of directors have unanimously recommended that shareholders reject Westgold Resources’ (WGX) takeover offer lobbed on June 6
- Westgold offered to buy the company at 25 cents a share, however, since the announcement, the offer price has traded below MGV’s share price
- Musgrave directors say Westgold recognises the “inherent value” of its Cue gold project in Western Australia
- Shareholders are advised to take no action to reject the offer
- MGV shares slumped 2.54 per cent to 28.8 cents, while WGX shares jumped 6.32 per cent to $1.43 at market close
The directors of Musgrave Minerals (MGV) have unanimously recommended that shareholders reject Westgold Resources’ (WGX) takeover offer lobbed on June 6.
Westgold offered to buy the company at 25 cents apiece, however, Musgrave was against it for several reasons. Since the announcement on June 6, the offer price has traded below MGV’s share price.
The offer was made after Musgrave released its stage one pre-feasibility study for its Cue gold project, which uncovered “strong” gold results.
Cue is located on 310 square kilometres of highly prospective and sought-after exploration ground in the Murchison region in Western Australia.
Musgrave directors said Westgold recognises the “inherent value” of its Cue project.
The company listed other reasons for the rejection including the offer being opportunistic given Musgrave’s potential, Musgrave delivering immediate growth to Westgold and Musgrave’s shareholders facing the potential of adverse tax repercussions if the company accepts the offer.
Musgrave also reported that since the offer was not in cash, its true value is only attributed to a Westgold share.
The company’s focus remains on progressing Cue towards production and extending mine life through growing the existing resource base and the discovery of further high-grade gold deposits.
MGV shares slumped 2.54 per cent to 28.8 cents, while WGX shares jumped 6.32 per cent to $1.43 at market close.