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February 12, 2008 |
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ZINIFEX: Gets 5% of Allegiance Stake Through Lion Selection Zinifex Limited has secured over 5% of shares in Allegiance Mining NL as a result of Lion Selection's acceptance of its purchase offer of AUS$1/share, published reports say. Lion Selection is Allegiance's largest instutional shareholder. Its acceptance proved to Zinifex that the one dollar per share cash offer is a fair representation of Allegiance's value, Reuters says. "We believe this sends a clear signal to other Allegiance investors that Zinifex's Offer represents fair value and provides certainty in the current volatile market," Zinifex Chief Executive Officer Andrew Michelmore was quoted by Reuters as saying. Previous reports said that Allegiance Mining's board of directors had adviced its shareholders that the Zinifex offer is inadequate. The company's chairman, Tony Howland-Rose said in a statement that Zinifex's offer is "unsolicited, opportunistic, and inadequate." Zinifex has yet to convince Allegiance major shareholder, Jinchuan Group Limited, to accept its offer. According to Comtex, Jinchuan, which holds a 10.4% stake in Allegiance, is opposed to the proposal. The major shareholder had written to other holders stating its opposition against the deal. In a previous report from Bloomberg, it suggests that Zinifex's hostile offer stems from its plan to take control of Allegiance's Avebury nickel project in Tasmania, which has a US$3-billion supply agreement with Jinchuan, Asia's largest producer of the metal used in stainless steel. The offer stands until February 22. About Allegiance Mining Allegiance Mining is an Australian nickel mining company that is about to commission its first nickel project located in Tasmania. Its Avebury nickel project is due to start production in 1Q-08 and the company has an on-going exploration effort targeting nickel sulphide deposits. 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). Fitch said the outlook is stable. |
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