Belgium metal processor Nyrstar HV has returned for another tilt at CBH Resources, despite the controlling position and opposition of its biggest supporter, Toho Zinc of Japan.
CBH Resources said yesterday that it had granted Nyrstar permission to conduct limited due diligence.
The news saw the shares rise 1c to 19c, a rise of more than 5% on the day.
CBH said it had received a new proposal from Nyrstar after the close of the market on Friday, April 9, offering 19.5c per CBH share and $1,000 per convertible note.
The new proposal included a request to complete limited, confirmatory due diligence.
The CBH independent committee has approved that request, CBH said yesterday.
"Pending further advice from the independent committee, shareholders should take no action," CBH said.
CBH is a zinc, lead and silver producer with key projects in NSW and Western Australia.
Directors had recommended shareholders approve a deal with Toho Zinc that would more than double its stake in CBH.
A CBH shareholders meeting is due on April 28.
A condition of the Nyrstar offer was that the resolutions to be considered at the April 28 meeting be not approved or be withdrawn prior to the meeting, CBH said.
"At this point, the arrangements for this meeting will remain in place, however shareholders will be notified of any changes beforehand," CBH said.
In their letter to CBH, Nyrstar said: "At this stage we believe that there is a structure that is capable of implementation that addresses the Committee’s comments.
"Specifically, we believe that an offer to acquire all of CBH’s ordinary shares (with a 50.1% minimum acceptance), combined with an offer to acquire all of CBH convertible notes with no minimum acceptance condition would address the concerns raised by the Committee.
"We believe that such a structure would provide a superior outcome to shareholders and noteholders of CBH, in comparison to the Revised Toho Proposal, and is capable of implementation with the support of holders of only 50.1% of CBH shares, thereby addressing the comments of the Committee that resulted from Toho’s declared objections to our earlier approach to you.
"The Possible Nyrstar Proposal would apply to 100% of the issued ordinary share capital of CBH, together with any ordinary shares that are issued up to the date of the acquisition as a result of the exercise of options.
"Nyrstar would also offer to acquire 100% of the convertible notes on issue at their par value of A$1,000 per note. Nyrstar would discuss with CBH the optimal form of consideration for acquiring the convertible notes.
"Nyrstar believes that the Possible Nyrstar Proposal would adequately address the structuring concerns which have been raised while at the same time providing a superior value proposition to CBH shareholders far exceeding the latest proposed transactions involving Toho.
"The Possible Nyrstar Proposal would also provide convertible noteholders with the opportunity to receive a certain and attractive price for their notes (100 cents in the dollar). Nyrstar would consider structuring the offer to noteholders as a takeover offer for all of the notes held by each noteholder.
"Structuring the offer in this way would allow for more rapid receipt of cash consideration by convertible noteholders compared to relying upon the right to have their notes redeemed in the event of a change in control of the shares."
