Having now read APAC's release, I can see that this is a real cheap way of grabbing control without the need of making a takeover bid. It would appear that next month Metals X will make a 1 for 3 rights issue @ 12c to raise $36mil by issuing 302mil shares and APAC Resources will sub-underwrite the issue and virtually pick up the whole issue as potentially no-one else will pay the 12c.
It will give APAC a 40% interest in Metals X and there will be no need for them to do a takeover bid as they've acquired their interest through a sub-underwriting agreement.
So more dilution for minority shareholders but Metals X needs the money and the shares are being issued above current market value.
It could be a bluff to get SFR or another bidder to pay the 'price' for Nifty now as they would know that once this issue goes through then the APAC controlled board won't be selling it but it is more likely the case that no one is really that interested in Nifty and so this issue is necessary to finance Renison expansion plans.
MLX Price at posting:
9.5¢ Sentiment: None Disclosure: Held
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