Royalco rejects bid by Anglo Pacific11:51, Wednesday, 13 May...

Royalco rejects bid by Anglo Pacific
11:51, Wednesday, 13 May 2009

Sydney - Wednesday - May 13: (RWE Aust Business News) - Royalco
Resources (ASX:RCO) has rejected the unsolicited on-market offer for its
shares announced earlier today by Anglo Pacific Group (ASX:APG) at 30c
per share.
Royalco regards the offer price as significantly undervaluing the
company at only $16 million for the 52.8m shares on issue.
Royalco said Anglo Pacific has purchased its current shareholding
in Royalco at prices of up to at least 48c per share, well above the
current offer price.
Since listing in June 2006 at 50c a share, Royalco's shares have
traded as high as $1.19.
The global financial crisis together with well publicised
difficulties of major shareholders and their financing arrangements have
adversely impacted on the current share price, but the fundamental value
of Royalco is unaffected, the company said.
It has cash and liquid assets including gold of approximately
$8.5m and ongoing royalty income from the Reefton gold project of some
$5m-5.5m per annum for each of the next 3-4 years as well as ongoing
royalties from the Mt Garnet operations of Kagara Ltd (ASX:KZL) and the
Mt Kelly operations of Copperco/Cape Lambert.
David Ogg, executive director finance, said the Royalco directors
who have a collective approximate 18 per cent shareholding interest in
Royalco presently intend to reject the offer for their respective
shareholdings.
The offer period does not officially commence until 28th May 2009
and does not end until at least 29th June 2009.
In the absence of exceptional circumstances, the offer cannot be
withdrawn prior to its expiry.
Shareholders are advised to reject the offer and to take no
action in relation to their shareholding.
Royalco has appointed Baker & McKenzie as legal advisers in
relation to the offer.