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Guangdong makes new bid for PanAust

Monday, March 30, 2015 - 09:34

[MELBOURNE] Guangdong Rising Assets Management Co, a state-owned Chinese investor, made a new offer for PanAust Ltd valuing the copper producer at about A$1.1 billion (US$773 million). The target's shares jumped the most in six years.

The cash bid of A$1.71 a share from PanAust's largest shareholder was unsolicited and made when both the producer's shares and copper and gold prices are trading at or near five- year lows, the Brisbane-based company said today in a statement.

PanAust, which has mines in Laos and is seeking to develop one of the world's largest undeveloped copper and gold deposits at Frieda River in Papua New Guinea, last May rejected as too low Guangdong Rising's previous offer of A$2.30.

PanAust rose 40 per cent to the offer price of A$1.71 at 11:35 am in Sydney trading, its largest advance since Jan 5, 2009. It had plunged 23 per cent in the year before today as copper slipped 7 per cent.

The board "will consider the takeover offer and will provide advice to shareholders in due course," the producer said in the statement.

Guangdong Rising's offer meets its objective of securing high quality non-ferrous metals projects globally, the bidder said on Monday in a separate statement. Guangzhou-based Guangdong holds 22.5 per cent of PanAust, according to its statement.

Deals to acquire copper assets or producers rose last year to the highest since 2006, with transactions worth US$20.3 billion proposed, pending or completed, according to data compiled by Bloomberg.

Copper demand is poised to rise as China's shift to consumption-led growth spurs demand for energy transmission and household appliances, all of which require the metal.

BLOOMBERG