After making a takeover offer for mineral explorer Allegiance Mining last month, Zinifex has today been criticised by the target's largest shareholder for undervaluing the company at $1.00 per share offer.
Jinchuan Group of China, is a major shareholder of Allegince Mining with a shareholding of 10.4%.
Responding to Zinifex's offer, Jinchuan said:
"With its near-term production profile and highly prospective Nickel Province, the vast majority of which remains unexplored, Jinchuan believes there to be significant further upside in Allegiance and therefore the $1.oo per share offer for Allegiance is not reflective of the true value of the company,"
"We strongly support the management and board of Allegiance and believe they are creating excellent value for shareholder and jointly we will continue to do so," Jinchuan said.
In a slide presentation submitted to the Australian Stock Exchange in December, Zinifex said the potential takeover is an excellent fit with Zinifex's strategy, an attractive entry into nickel and adds near term production with scope for expansion.
Zinifex is offering 90 cents per Allegiance share, of $1.00 per share if it acquires more than 30% or if the Allegiance board recommends the offer.
At 1.24pm AEST, shares in AGM rose 1 cent to $1.05, while ZFX lost 27 cents at $11.26.
