Aussie miner’s no action tip
Print Edition
AUSTRALIAN gold and copper miner PanAust’s board is advising shareholders not to take any action over an A$861 million (US$655 million) takeover bid by China’s state-owned Guangdong Rising Assets Management while it assesses the offer.
Brisbane-based PanAust’s Chairman Garry Hounsell said the unsolicited takeover came when the miner’s share price and copper and gold prices were near five-year lows, and was below what Guangdong Rising pitched when it mulled a takeover last year.
“The PanAust board will consider the takeover offer and will provide advice to shareholders in due course,” Hounsell said in a letter to investors.
“In the meantime, the board recommends shareholders take no action in relation to the takeover offer.”
The Chinese state-owned enterprise launched the bid on March 30, offering A$1.71 a share, a 17 percent premium to the stock’s six-month weighted average, and valuing PanAust at A$1.1 billion. The SOE already owns about 23 percent of PanAust, and will pay A$861 million in cash to mop up the remainder. The Chinese company tested the waters for a takeover bid last year, indicating it was willing to pay A$2.30 a share and undertaking due diligence on a potential deal before backing out of the proposal.
Shares of PanAust have climbed 41 percent to A$1.74 since the offer was lodged, indicating investors expect a better bid will emerge.
But SOE Chairman Wei Zhu said at the time of the bid that the chance of another buyer with a better offer was low given the cash premium and the SOE’s stake in the mining firm.
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