Copper miner Panaust has rejected a second $1.1 billion takeover bid from Chinese state-owned resources company Guangdong Rising Assets Management (GRAM).
The PanAust board says the offer price at $1.71 a share is inadequate. The latest offer is a big discount to last year’s $2.30 a share bid by Guangdong, which already has 22.5% of PanAust.
Guangdong says its latest offer provides shareholders with certainty of cash in a world of risks. Copper is at five year lows.
However, the Panaust board told shareholders today: “There are compelling reasons why GRAM should pay more if it wishes to acquire increased ownership of PanAust. With PanAust’s share price now trading above the GRAM offer price, it suggests that the market also agrees with this view.”
Panaust last traded at $1.74.
Fred Hess, PanAust managing director, said: “Whilst investor sentiment towards the resources sector remains variable and driven by short‐term factors, at PanAust we are confident that we have the right assets in the right commodities to drive long term value for our shareholders.”
PanAust has two mines in Laos and last year bought the Frieda River mine in Papua New Guinea from Glencore.
The company’s production target is to grow annual copper production by 25% in 2018 and 2019 with no further development capital required.
Panaust announced sales for the 12 months to the end of December of Sales revenue of $US678.8 million and an after tax loss of $US221.4 million. The result included impairments of $US264.7 million.