The Focus Minerals Ltd (ASX: FML) share price is ending the week on a high.
At one stage today, the gold explorer and developer's shares were up a whopping 39% to 36.2 cents.
In afternoon trade, the Focus Minerals share price has pulled back a touch from its intraday high but remains up 17% to 30.5 cents.
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Why is the Focus Minerals share price rocketing higher?
While there isn't any real news out of the company today to explain the sensational rise in the Focus Minerals share price, there is a likely explanation for it.
That is Theta Gold Mines Ltd (ASX: TGM) and its aim of acquiring the company via a hostile takeover.
Theta Gold Mines recently offered 2 of its own shares for ever Focus share owned. At the time, this implied a value of 36 cents for each Focus share, which represented a 41.2% premium to the Focus share price of 25.5 cents on 8 December.
However, Focus wasn't biting and told shareholders not to take action in response to the offer.
Why is Theta interest in Focus?
Theta explained the rationale for the acquisition.
It said: "The TGM [Theta Gold Mines] Offer will, if accepted, allow Focus shareholders to become members of a larger, more liquid and more geographically diverse group. Should [major shareholder] Shandong Gold accept the Offer, the resultant combined group would have a combined exploration portfolio of over 1,000km2 spread across the West Australian goldfields and South Africa. Should Shandong Gold not accept the Offer, TGM's Offer seeks to aggregate minority holdings in Focus and (with an increased holding and substantial management experience) would allow TGM to exercise influence to encourage the prompt development of the Focus assets."
Given the significantly higher than normal volume today, it could be a sign that Theta Gold is looking to buy shares on market to build up a position that supports its takeover proposal.
