Talk of split over $625m ConsMin bid Michael Vaughan Consolidated Minerals managing director Rod Baxter has denied suggestions of a split on the company's board in relation to a $625 million takeover offer from Brian Gilbertson's Pallinghurst Resources. It came as industry sources said some members of the board were no longer comfortable with the proposal and suggested some directors wanted chairman Carter to resign. "There's no suggestion at all of any split on this [issue] and the board maintains its support as previously indicated for the transaction, in the absence of a superior offer," Mr Baxter said. There have been reports of opposition from retail shareholders since the release of the scheme booklet for the proposal after the close of trade last Friday. However, major shareholders have been reluctant to go on the record. An independent expert's report from PricewaterhouseCoopers said the Pallinghurst consortium's offer for 60 per cent of the company was not fair but was reasonable. It advised shareholders to accept the bid but said there was no way of evaluating the potential benefits that ex-BHP Billiton chief executive Mr Gilbertson would bring to the deal. When Mr Gilbertson was in Sydney a fortnight ago, he indicated there were a number of proposals he was working on that would transform the ConsMin. The scheme document says the board has already seen presentations on certain of Mr Gilbertson's ideas, although none were binding. PricewaterhouseCoopers valued ConsMin at between $2.33 and $2.77 a share and said the Pallinghurst bid implied a value of $2.50 a share. A vote on the bid will take place on July 19, at which 75 per cent of shareholders must support the proposal for it to proceed. The biggest contributor to ConsMin's earnings is it's Woodie Woodie manganese mine in Western Australia. The company expects to produce between 900,000 and 925,000 tonnes of the steel-making material this year. The price of manganese has risen sharply in the past two months and ConsMin's current pricing guidance expires at the end of June. However, in the scheme booklet ConsMin provided its view of the forward manganese market. It indicated it expected to achieve a manganese price of $US3.30 a dry tonne in the second half of the year, up from $US2.50 in the current half. In 2008, it forecasts the price will fall to $US2.70 and $US2.60 for the following two years. A report from metals price news service Ryans Notes at the start of the week said ConsMin ore has achieved a price of $US7.40 a dry tonne for the third quarter. Mr Baxter denied the company was receiving that price but said all indications were that prices had risen from the first half of 2007. ConsMin expected negotiations for the next quarter to conclude at the end of this month. Shares in ConsMin firmed 1¢ yesterday to $2.80.
CSM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
