Australian miner and explorer, Herald Resources has once again unanimously recommended its shareholders accept a$504.8 million takeover offer from a consortium of Chinese and Indonesian interests, but warned share holders to first wait until the end of the offer period.
State-controlled Indonesian mining group Pt Antam and Chinese government-backed miner Shenzen Zhongjin Lingnan Nonfemet made a $2.50 per share all cash conditional takeover offer through a Singapore-based vehicle Tango Mining at the end of January.
In response to the bidder’s statement, Herald’s board said today it “strongly advises Herald shareholders to withhold their acceptance until near the end of the Tango Offer period”.
The date will be advised in due course.
The advice comes after a number of shareholders took up the previous offer from Calipso, which was recommended by the directors at the time of its bid. As a consequence, those shareholders are unable to withdraw their acceptance and take up Tango’s superior bid.
“Shareholders should note that once they accept the Tango Offer, they may forgo the opportunity to accept a subsequent superior proposal, should one eventuate,” Herald said.
Tango is offering $2.50 cash per share for the entire issued capital of Herald, compared to Calipso’s $2.25 per share.
The takeover offer from Tango is subject to Foreign Investment Review Board approval and a minimum acceptance condition of 50.1%.
Antam is a state-controlled Indonesian mining-group that already holds 20% interest in Herald Resource’s 80%-owned Dairi zinc/lead project in Northern Sumatra, Indonesia.
Zhongjin is a zinc/lead mining and smelting company based in the People’s Republic of China and operates the low cost Fankou mine.
The primary and most attractive asset of Herald Resources is an 80% interest in the high-grade zinc/lead Dairi Project in Indonesia.
The bidding war has provided share price support in a volatile market. Trading around $1.83 before the bid from Calipso on 11 December, Herald shares has been trading at an average of $2.425 ever since.
Following the takeover announcements, shares in HER hit a 52-week high of $2.72 during intraday trading.
This is more than 200% increase from 1-year low of 99 cents in April.
