Zinifex 'can't understand' bid rejection January 20, 2008 - 3:44PM
Zinc and lead miner Zinifex Ltd says it cannot understand how takeover target Allegiance Mining NL considers a takeover offer by Zinifex to be too low.
Zinifex has made an offer of 90 cents for each share in minerals explorer Allegiance, which rises to $1.00 if Zinifex obtains a relevant interest of 30 per cent.
At $1.00 the Zinifex offer values the target at about $775 million.
Acting Zinifex chief executive Andrew Michelmore said on Sunday Zinifex had been surprised that Allegiance had rejected its bid as too low.
"We were surprised. When we first approached them (Allegiance), we let them know we were going to put in a bid, we have a total open-door approach," Mr Michelmore told Sky News.
"We wanted to talk to them about it. They've rejected that. No contact to date.
"So with the target's statement, we were really looking for some more information that would give us some basis for their view on valuation and for their shareholders.
"There's nothing in there that allows anyone to do any valuation.
"It's really: `Trust me, I know it's better'."
Mr Michelmore also noted that Allegiance had said that it had been approached by other parties.
"We haven't heard anything apart from what's been stated by their chairman (Allegiance chairman Tony Howland-Rose) as to third parties, so give us some evidence of that," Mr Michelmore said.
Allegiance said the Zinifex bid was too low given Allegiance's mining prospects.
Allegiance chairman Tony Howland-Rose said Allegiance had a great future ahead of it in finding and ferreting out nickel deposits.
He said Allegiance's flagship Avebury nickel project in Tasmania was just about to come into production.
"And we get a bid," he said.
"That's fine. That's the world we live in. But it doesn't represent good value, I believe, for shareholders," he told Sky News.
He said $1.00 per Allegiance share was too low.
"The value is just not there in that dollar when you consider that we have any one of three or four or five very major prospects there - any one of which could yield an Avebury or two," he said.
Shares in Allegiance closed 0.5 cents lower at $1.06 on Friday.
