The story below is from The Age Newspaper today. ConsMin bidder...

The story below is from The Age Newspaper today.




ConsMin bidder still up in air

Perth
May 28, 2007

BRIAN Gilbertson jets into Australia tomorrow in a bid to salvage his floundering $320 million cash-scrip bid for control of manganese and nickel miner Consolidated Minerals.

The former BHP Billiton chief and one-time South African rocket scientist will arrive in Sydney for the start of a week-long round of briefings with investors, Australian institutions and the media to convince them of the merits of the offer proposed by his private equity-backed resources investment vehicle, Pallinghurst Resources.

Pallinghurst is offering shareholders $1.38 a share in cash plus two shares in a "new" Gilbertson-backed ConsMin for every five shares already held in the company.

If successful, Pallinghurst would emerge with 60 per cent of ConsMin, which would remain unchanged other than having access to the expertise and deal-making clout of Mr Gilbertson and his long-time colleague Arne Frandsen.

The deal notionally valued ConsMin at $2.28 a share when it was unveiled in February, but has failed to gain any traction, with investors given the lack of any premium for control, especially in light of a resurgent manganese market and record nickel prices now above $US50,000 a tonne.

ConsMin shares have traded above the notional offer price ever since it was unveiled, and on Friday closed 4¢ weaker at $2.80. Pallinghurst maintains that the value of its offer has been dragged higher on the back of ConsMin's price strength.

But critics argue Pallinghurst is offering just $1.38 a share in cash for a controlling stake in ConsMin given that shareholders already own the stock that they will receive under the offer.

With a rival private equity group linked to investment banks UBS and Goldman Sachs JBWere also believed to be exploring a possible counter-offer, many local analysts now question Pallinghurst's chances of success.