ASX-listed, West Africa-focused mining company Tietto Minerals has received an A$629m ($399m) buyout proposal from Chinese miner Zhaojin Mining Industry Company.

Zhaojin already owns a 7.02% stake in Tietto, making it the second-largest shareholder.

Through its subsidiary Zhaojin Capital, it has now offered to acquire the remaining shares at A$0.58 apiece.

The offer price marks a 36% premium to Tietto’s stock close of A$0.425 per share on 27 October 2023 and a 42% premium to its five-day volume-weighted average price of A$0.408 on the same day.

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By GlobalData

It has already secured approval from Australia’s Foreign Investment Review Board and now awaits Chinese regulatory clearance.

Chijin International is the largest shareholder in Tietto, owing 12.49% or 140.8 million shares. Other shareholders collectively own the remaining 80.49% or 907.6 million shares.

According to Zhaojin, the acquisition will allow the company to expand its business overseas and improve its overall profitability.

If the offer is accepted, it aims to support and expedite the growth of Tietto by developing its Abujar gold mine, as well as continue with exploration in Cote d’Ivoire, Liberia and other regions.

Barrenjoey and Corrs Chambers Westgarth will serve as the financial and legal advisers to help Tietto assess the buyout bid.

Tietto said in a statement: “There is no certainty that the indicative proposal will ultimately result in a binding proposal that the board of Tietto is willing to recommend to its shareholders.

“The board will carefully consider the indicative proposal and provide shareholders with their advice in due course.”