cathay 'disappointed' by dml bid rejectection

http://www.businessspectator.com.au/bs.nsf/Article/Cathay-disappointed-by-Discovery-denial-pd20121012-YYVHW?opendocument&src=rss


Cathay 'disappointed' by Discovery bid rejection
Published 11:14 AM, 12 Oct 2012


By a staff reporter

Cathay Fortune Corporation (CFC) and China-Africa Development Fund are disappointed by Discovery Metals Ltd's dismissal of their unsolicited, indicative, non-binding, takeover bid.

In a statement, Cathay confirmed their meeting with Discovery directors, during which it reiterated it $1.70 per share cash proposal to implement a scheme of arrangement with limited conditionality.

"We are extremely disappointed with the response and lack of engagement from Discovery Metals board of Directors," Yong Yu, founder and largest shareholder of CFC, said.

CFC representative Kalidas Madhavpeddi said the group "strongly believe" that the proposal fully valued the Boseto Copper Project, and appropriately considered any potential exploration upside.

This includes "timing, grade, scale, distance, capital and inherent risk for satellite deposits,” he said.

Earlier this week, Discovery said its representatives told Cathay and CAD Fund that the price proposed was inadequate and did not reflect, in the context of a change of control, the value of the company’s operations and expansion plans.

It also failed to reflect "the potential to increase the resources on the company’s tenements through further exploration, the strategic value of the company with an operating project and management team in Botswana, and the scarcity value of the company," Discovery said.

"The directors have advised the representatives of CFC and CAD Fund that if they wish to put a new proposal to the Board, the Board will consider and assess that new proposal on its merits."