by pajingo batman

From todays Aussie.

NQM looks like being one of those Macarthur Coal-type takeover sagas where no one prevails.
FAR from simplifying the ownership structure of Queensland's Pajingo goldmine, the two-way takeover tussle for 60 per cent owner North Queensland Metals threatens to have the opposite effect.

Acting off his own bat, NQM founder and major holder Don Walker has formally sold his 19.9 per cent holding to Conquest Mining (CQT, 32c), which last week improved its cash-scrip offer in response to Heemskirk (HSK, 31c), Pajingo's 40 per cent holder that lobbed its own scrip offer.

The NQM board (sans Walker) has embraced the Heemskirk offer as a means for holders to get 100 per cent ownership of Pajingo, which currently runs at 70,000 ounces a year but is slated to ramp up to more than 100,000 ounces.


While Heemskirk has the support of 7.5 per cent NQM holder Newmont, its offer is conditional on 90 per cent acceptance, which is impossible without Walker's holding.

In a statement yesterday, Heemskirk noted that Conquest's offer remained conditional (on 50 per cent acceptance) and that Heemskirk retained the discretion to vary its own offer. If Conquest can grab another 30 per cent or so, it will be done and dusted. But it looks an uphill task without NQM's endorsement.

Heemskirk's offer of 1.2 of its own shares per NQM share values NQM at 37.2c, while Conquest's offer of half a Conquest share plus 15c values the target at 31c apiece.

Just as importantly, Heemskirk's offer increases exposure of NQM holders to its main asset -- Pajingo -- while the Conquest offer would dilute their exposure to 12 per cent.

Apart from delivering cash, Conquest exposes NQM holders to its undeveloped (and capital hungry) Mount Carlton project. In the usual takeover tit for tat, Conquest claims Heemskirk is too hard up for cash to convert $29 million of convertible notes when they mature in April next year.
By Pajingo, it's a tricky one. But given NQM investors bought the stock because of Pajingo in the first place, the Heemskirk offer would have more appeal. As for the elderly Walker, we're sure he had his reasons -- presumably the 15c cash.

NQM looks like being one of those Macarthur Coal-type takeover sagas where no one prevails. This is reflected in NQM's share price, which is trading 19 per cent below the Heemskirk offer. Hold.