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PanAust board tells shareholders to stay put as Chinese SOE launches A$861 mln takeover

By Paul McBeth | April 3, 2015, Friday | Online Edition

Australian gold and copper miner PanAust’s board is telling shareholders not to take any action over an A$861 million takeover bid by Chinese state-owned enterprise Guangdong Rising Assets Management while it assess the offer.

The Brisbane-based company’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 the Chinese SOE 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.”

Guangdong Rising Assets Management 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.

In making its pitch, Guangdong Rising Assets Management chairman Wei Zhu said the likelihood of another buyer with a superior offer was low given the cash premium and the SOE’s cornerstone stake in the mining company.

 

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