PERTH (miningweekly.com) – The directors of takeover target Phoenix Gold have advised shareholders to reject an offer from Chinese major Zijin Mining after an independent expert valued the offer neither fair nor reasonable.
The independent expert valued Phoenix shares at between 15.6c a share and 24.4c a share, which was well above the 10c a share in cash being offered by Zijin.
“The directors consider that the Zijin offer does not reflect the inherent value of Phoenix and is designed to secure opportunistic control. If Zijin were successful, they would capture value that the board believes rightly belongs to all our shareholders,” said Phoenix executive chairperson Dale Rogers.
He noted that by accepting the Zijin offer, Phoenix shareholders would remove their exposure to any potential increase in value that the company’s assets could offer.
Rogers pointed out that fellow-listed gold miner Evolution had also announced its intentions to make a competing offer, at a headline price of 12c a Phoenix share, which was a 20% premium to the Zijin offer.
The Foreign Investment Review Board this week approved Evolution’s play for Phoenix, allowing the company to formally launch its takeover offer in late September.
The Evolution offer would be subject to the gold price not falling below A$1 250/oz.
Evolution currently holds a 19.8% stake in Phoenix.