Shares in copper miner PanAust are on a tear on a takeover by a Chinese company

Image: Paula Bronstein / Getty Images.

PanAust shares are surging on a discounted takeover offer by Guangdong Rising Assets Management in China.

The state-owned resources company offer of $1.71 a share values the copper and gold miner at $1.11 billion. Guangdong already has 22.5% of PanAust.

However, this is a big discount to the $2.30 a share bid by Guangdong Rising Assets Management last year.

Copper prices are at five-year lows.

PanAust has two mines in Laos and last year bought the Frieda River mine in Papua New Guinea from Glencore.

Guangdong said the offer provides shareholders with certainty when there were a range of risks to its share price.

“I believe that the likelihood of another bidder emerging with a superior proposal is low, given the substantial cash premium offered,” said chairman Wei Zhue.

The board of PanAust is considering the offer.

PanAust shares jumped by 40% to the offer price of $1.71.

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