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January 14, 2008 |
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ZINIFEX LTD: Allegiance Shareholder Says Zinifex Offer “Too Low” Allegiance Mining NL's largest shareholder, Jinchuan Group Ltd., said that Zinifex Ltd.'s AU$775-million bid for the company is too low, various reports say. Jesse Riseborough of Bloomberg News quotes Jinchuan as stating that Zinifex's AU$1.00 a share offer "is not reflective of the true value of the company." Zinifex, last month, offered 90 cents for each share of Allegiance and said it would raise the bid to AU$1-a-share should it gain more than 30% board approval from Allegiance. The Australian Associated Press reports that at 90 cents a share, Allegiance is valued at AU$697.435 million, increasing to AU$744.927 million if the bid is lifted to AU$1.00 per share. The Troubled Company Reporter-Asia Pacific reported on Dec. 19, 2007, that the board of directors Allegiance advised its shareholders to take no action regarding Zinifex's all-cash takeover offer, saying that the offer is unsolicited and opportunistic, and designed to take advantage of the company. AAP quotes Jinchuan, which has 1 10.4% stake, says, "We strongly support the management and the board of Allegiance and believe they are creating excellent value for shareholders and jointly, we will continue to do so." Allegiance's Avebury nickel mine, about 30 kilometers from a Zinifex zinc mine, is expected to yield 8,500 tonnes of nickel annually, as stated by James Regan of Reuters. Jinchuan, writes AAP, has an agreement to buy all nickel produced at the mine. According to Reuters, a series of corporate transactions by Jinchuan outside of China has fueled market speculation that Jinchuan would table an offer of its own for the company, which is in the late stages of developing mine in the island state of Tasmania. About Zinifex Ltd. Zinifex Limited, one of the world's largest integrated zinc and lead companies -- http://www.zinifex.com/ -- is headquartered in Melbourne, Australia. The company owns and operates two mines and four smelters. The mines and two of the smelters are located in Australia and supply the growing industrial markets of the Asian-Pacific region, including China. The company also has a zinc smelter in the Netherlands and the United States. The company sells a range of zinc metal, lead metal, and associated alloys in 20 countries. More than 80% of the company's products are distributed outside Australia, particularly in Asia, which is experiencing significant growth in construction activity and vehicle production. Zinc is used for steel galvanizing and die-casting and lead for lead acid batteries used mainly in cars and other vehicles. * * * The Troubled Company Reporter-Asia Pacific reported on Dec. 18, 2007, that Fitch Ratings affirmed Zinifex Limited's 'BB+' Long-term foreign currency Issuer Default Rating (IDR), following the announcement of an all cash offer for Allegiance Mining NL (Allegiance). The Outlook is Stable. |
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