takeover talks keep oxiana buoyed, page-13

SMH Business Day

Mining countdown

The official countdown to the $12 billion tie-up between Zinifex and Oxiana began yesterday, leaving potential gatecrashers with less than five weeks to make a play for either miner on an individual basis.

The long list of potential interlopers - including Xstrata, Anglo American, Teck Cominco, Lundin Mining, Antofagasta, Freeport McMoran, Vedanta Resources and Chinese groups - were thought to be unlikely to bid for either company until details were provided from the 500-plus pages of scheme documentation released yesterday morning.

Only Zinifex shareholders will vote on the "merger of equals" deal at a June 16 meeting.

Independent expert Grant Samuel said the terms of the deal were fair to Zinifex shareholders.

Grant Samuel valued Zinifex at $6.2 billion to $6.9 billion and Oxiana at $5.9 billion to $6.7 billion.

Grant Samuel noted that while the deal did not provide a control premium to Zinifex shareholders, the combined company would have an open share register and could receive a takeover premium at a later stage.

Most analysts think predators would prefer to bid for the combined entity rather than the individual companies. But they have not ruled out individual plays since Zinifex has more zinc exposure and cash, while Oxiana has more copper and gold exposure and growth potential.

Oxiana shares closed 6c higher at $3.54, while Zinifex shares closed 5c lower at $10.42.

It appears the market is betting Oxiana is the more likely target of a rival bid, given its 3.1931-for-1 offer valued Zinifex at $11.30.

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