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Australia's PanAust rejects US$844m bid from China's Guangdong Rising Assets Management
[MELBOURNE] Australian copper and gold miner PanAust Ltd rejected on Wednesday an US$844 million bid from its top shareholder, China's Guangdong Rising Assets Management (GRAM), but said it would be open to discussing a better offer.
GRAM offered A$1.71 a share, valuing PanAust at A$1.1 billion (S$1.13 million), well below an offer of A$2.30 a share it made last year that PanAust also rebuffed. "The PanAust Board believes there are compelling reasons why GRAM should pay more if it wishes to acquire increased ownership of PanAust," the company said in a statement, as expected.
It justified the rejection by saying that its shares, at A$1.74, last traded above GRAM's offer, indicating the market agreed that the offer was too low. "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 in a statement.
PanAust mines copper in Laos and paid US$125 million in late 2013 for the rights to the huge Frieda River copper project in Papua New Guinea. It cut 5 per cent of its workforce in January as copper traded around its lowest level in half a decade.
Guangdong, which owns 24 per cent of PanAust, has urged shareholders to accept the all-cash offer, warning that PanAust may need to raise additional capital to get the Frieda River project into production, potentially sending its shares lower.