Vault Minerals Ltd's stock plummeted 8.41% during intraday trading on Wednesday.
The sharp decline follows news that Regis Resources will take over the smaller peer Vault Minerals to create Australia's third-largest listed gold producer, with the combined entity valued at around A$10.7 billion.
UBS noted that Vault Minerals was among the cheapest mid-cap gold producers and was trading at a significant discount to its net present value estimates prior to the deal announcement.