consmin pallinghurst topup cancelled

Pallinghurst's Consmin top-up cancelled
November 1, 2007 - 6:10PM

The Takeovers Panel has ordered the cancellation of Pallinghurst Resources Australia Ltd's novel `top-up' payment as part of its takeover bid for Consolidated Minerals Ltd.

The order follows the panel's decision on Wednesday to declare unacceptable circumstances regarding the `top-up' payment, as requested by Pallinghurst's rival Palmary Enterprises Ltd.

In a media statement late Thursday, the panel said ConsMin shareholders who had accepted Pallinghurst's offer after the dispatch of its second bidder's statement, which included the `top-up' payment, could withdraw their acceptance.

Pallinghurst must advise affected ConsMin shareholders of their withdrawal rights, and the effect of the orders on other ConsMin shareholders as soon as practicable.

Pallinghurst, led by former BHP chief Brian Gilbertson, may withdraw either or both of statements made on October 12, which said the company would not increase its $4.50 per share bid or voluntarily extend its bid period.

The panel said Pallinghurst could do this by issuing a supplementary bidders statement on Friday.

Finally, the panel ordered Pallinghurst to extend its offer until November 16.

The panel has stayed its orders, excluding the order regarding the offer period extension.

Pallinghurst has lodged a notice of appeal seeking review of the decision, and the panel's president is now assembling a review panel.

Before the issuing of the panel orders, Pallinghurst said in a statement that it "strongly disagrees" with the Takeover Panel's decision to declare unacceptable circumstances.

"Pallinghurst also notes that it has obtained independent legal advice from a Queens Counsel, which confirms that the top-up structure is compliant with ... the Corporations Act," Pallinghurst said.

It also accused Palmary of possibly breaching Australian laws in its bid for ConsMin.

Pallinghurst said that Palmary chief Gennadiy Bogolyubov had been acting in concert with his Privat Group business partner, Igor Kolomoisky, amassing a significant amount of shares in ConsMin without disclosure to the market.

Under Australian law disclosure is required for shareholdings greater than five per cent.

It was revealed on Tuesday that Palmary was one of five companies that held a combined 17.7 per cent stake in ConsMin, but Palmary pleaded ignorance.

However, two of the four other companies appear to be connected with Mr Bogolyubov, a Ukrainian billionaire.

Pallinghurst said it had evidence that Mr Bogolyubov and Mr Kolomoisky "act as associates in respect of Palmary's offer for CSM (ConsMin)", and encouraged ConsMin and Australian regulators "to urgently pursue these serious matters".

ConsMin said in a statement that its enquiries to determine the ultimate beneficial owners of the 17.7 per cent interest continued.

Shares in ConsMin closed up one cent at $4.88 on Thursday.