PERTH (miningweekly.com) – Takeover target Phoenix Gold on Tuesday announced that shareholder Geologic Resource Partners had withdrawn its support of a takeover offer from China’s Zijin Mining.
Geologic Resource Partners in June backed the Zijin bid by executing a prebid agreement with Zijin, increasing the Chinese company’s stake in Phoenix Gold from 8.91% to 17.9%.
However, following a separate takeover offer from ASX-listed Evolution Mining for Phoenix Gold, Geologic Resource Partners had withdrawn from the Zijin prebid agreement.
Evolution, which currently held a 19.8% stake in Phoenix, had offered to acquire all of the outstanding shares in Phoenix Gold for 0.06 of its own shares, and 6c in cash, for every Phoenix share held.
Zijin had offered 10c in cash for every Phoenix share, valuing the company at A$47-million. Zijin’s offer was conditional upon the Chinese company securing at least a 50.1% stake in Phoenix.
Geologic Resource Partners told Phoenix that it considered the Evolution offer to be "superior", but had not given Phoenix any indication of its intention in relation to the new offer, nor had it entered into any agreement with Evolution that would oblige the shareholder to accept the offer.
As a result of Geologic Resource Partners exiting the prebid agreement, Zijin’s interest in Phoenix has decreased to 8.91%.
The directors of Phoenix again urged shareholders not to take any action on either of the bids until a formal recommendation was made.