GOLD and copper miner PanAust has rejected a state owned
Chinese company's $1.1 billion takeover bid, describing the offer as inadequate.
BUT the suitor, Guangdong Rising Asset Management (GRAM), is happy to take acceptances from PanAust shareholders, saying its offer was unconditional and therefore does not need the board's recommendation.PanAust, a Laos-focussed miner, said the $1.71 per share bid came as its share price, and copper and gold prices, were at five year lows. The medium to long term outlook for copper demand is strong, and there is a lack of new world class deposits, the company said. The offer also fails to recognise the extra production and value PanAust plans to generate with the Frieda River mine, in Papua New Guinea, that it bought from Glencore in 2014, it argued. "While we believe the current offer is inadequate, we are open to engagement and to considering all proposals which we believe are in the best interests of our shareholders," PanAust chairman Garry Hounsell said. GRAM's bid represents a 40 per cent premium to the $1.225 PanAust shares were trading at on March 29, the day before the bid was made. However it is well down on the $2.30 per share, or $1.5 billion, it offered in May 2014. The potential deal indicates China's continued hunger to buy up foreign resources despite slowing economic growth. GRAM, which already holds a 22.5 per cent stake in PanAust, said it has given PanAust shareholders the certainty of cash within seven days if they accept the offer. Acceptance would also mean they cannot benefit from any potential rival, higher offers. GRAM has previously warned PanAust shareholders they risk a dilution in value given the miner may need to raise equity to develop its PNG project. PanAust shares were up half a cent at $1.745 at 1145 AEST.
