Johannesburg - Durban Deep (DRD), the independent gold mining company, confirmed yesteday it is making a bid for Sydney-based Emperor Mines, which operates Fiji's Vatukoula gold mine.
Despite resistance from management and minority shareholders, Mike Prinsloo, DRD's chief executive, said he was "hopeful" the R190 million deal would be accepted and an offer to minorities would be made.
The transaction involves a swap of equity between the two companies. Prinsloo said a number of large institutions were already shareholders in both companies.
Earlier in the week, the management of Emperor leaked a letter to Australian newspapers saying there was discontent among minorities.
"Some members of Emperor's management team had publicly alleged ... that DRD was attempting to take over the company by stealth. These allegations were without foundation, but the offer to minorities would in any event serve to alleviate any reasonable concerns Emperor's management might have," said Prinsloo.
Emperor management pointed out that there was a provision in the company's articles of association that precluded a shareholder from acquiring 20 percent or more of the company's equity without extending an offer to remaining shareholders.
Prinsloo stressed DRD had no intention of breaching this restriction.
"DRD would, however, seek shareholder approval for the articles to be amended," he said.
"We believe the full value of Emperor's assets can be realised by refocusing its growth strategy and aligning it with DRD."
Vatukoula produced 30 000 ounces of gold in September, and the acquisition will boost DRD's annual output to 800 000 ounces.
DRD firmed 95c to R16,90 yesterday on the JSE.