delisting of ibr, page-16

Tamaya is hanging tough, but playing fair
May 23, 2007

TOUGH nut to crack that Hugh Callaghan.

Equally, the few remaining Iberian shareholders are proving just as staunch as the Tamaya off-market bid for their company draws to a close.

At least for the time being.

Let's put things in perspective.

It could be said that Tamaya's dream to create a mid-tier miner of note hinges, at the moment, on a takeover of the Armenian-focused gold hopeful Iberian Resources.

Tamaya is a bigger company in terms of market capitalisation and actually has a cash-flow asset in its Cinabrio copper mine in Chile.

According to Iberian's latest quarterly report, it did not receive one cent in gold sales from its Lichkvaz gold project in Armenia.

The Iberian board was quick to recommend merging with Tamaya under a 4-for-1 scrip bid when Tamaya came knocking late March. That created plenty of discontent on both sides, giving the impression that both sides had got the offer ratio close to perfect.

Fast forward two months, two bid deadline extensions and a move to unconditional status, and Tamaya has 74.1 per cent of Iberian stock with two days left until the bid closes.

As correctly predicted by Daily Assay, Tamaya chairman Hugh Callaghan is firm in stance that the bid will not be improved. For the remaining Iberian shareholders, it's either accept, or remain a shareholder in what will become a very illiquid market.

Tough, but fair.

And now Callaghan has indicated he has started moves to delist Iberian even if Tamaya doesn't get to the minimum 80 per cent acceptance level needed by the close of business on Friday.

The 80 per cent level would give it an option to extend the bid and the chance to test the 90 per cent compulsory acquisition threshold.

Tough, but fair.

"Tamaya considers that, based on the current level of its relevant interest in Iberian (and what it considers likely to be the level of its relevant interest following the close of the Offers), it is likely there will be substantially reduced liquidity for trading Iberian shares following the close of the offer," a supplementary bidder's statement reported.

Callaghan has said publicly that there are a few major fund managers in Iberian which are holding out and won't accept the bid until the death-knell, as is there standard practice.

Commonwealth Bank has a 6.47 per cent stake outstanding and its funds management arm, Colonial First State, has a 3.36 per cent stake, according to Bloomberg.

If that scenario plays out, Tamaya would get over the 80 per cent threshold, but whether it chooses to extend the bid is a matter for Callaghan and the board.

Callaghan has already started talks with the ASX about de-listing Iberian to save on compliance and listing costs.

Should that happen, the remaining minority shareholders would have to find another venue for selling their shares. And with Tamaya the only real buyer, its a fair bet they won't be getting access to the 4-for-1 offer.

Callaghan has run a very tight ship in the bid process and has been more than reasonable in information disclosure and Tamaya's plans for the merged entity.

He threw the dissident shareholders a final bone yesterday via the supplementary bidder's by announcing Tamaya had secured a processing mill from BMA Gold - which is in administration - for $3.5 million.

The mill will go straight to Lichkvaz and gives the minority shareholders a final reason to accept the bid and avoid a potential loss of face.

In effect, it leaves the door ajar just enough for the remaining shareholders to slip through at the last moment