Shares in copper miner PanAust (PNA) went against yesterday’s savage sell-off as they jumped 40% to $1.72 at the close after the board revealed it was considering a $1.71 a share off-market takeover offer from its major shareholder, Chinese State-owned Guangdong Rising Assets Management (GRAM).
It is the second time in a year that PanAust has received a takeover offer.
The Chinese company has lobbed an unconditional $1.1 billion offer to buy all of PanAust’s shares.
GRAM made informal offers to buy PanAust for $2.30 per share in May 2014, but was knocked back by the board of the company, and no further deal eventuated.
PanAust shares had fallen as low as $1.10 this month, which seems to have produced a second bid by GRAM, which already owns 22.5% of the miner.
PNA 1Y – PanAust receives substantially lower takeover bid
“PanAust notes that the takeover offer is unsolicited and has been made at a time when both the PanAust share price and spot prices for copper and gold have been trading at near five year lows," the company said in a statement to the ASX yesterday.
PanAust has two operating mines in Laos (Phu Kham and Ben Houayxai), both with about seven years of life left in them.
The company last year bought the giant Frieda River mine in Papua New Guinea from Glencore as its prime development focus, alongside the Inca D’Oro joint venture with Codelco in Chile.
Given the weak outlook for copper and the unsettled market outlook, it wouldn’t surprise if GRAM grabbed control of PanAust with this offer.
That despite the latest offer of $1.71 a share being well below the $2.30 a share proposal GRAM made for PanAust in 2014, which valued the company at nearly $1.5 billion.
However, that was a non-binding, indicative proposal unlike the formal offer announced yesterday, which will force PanAust’s board to make a formal recommendation.
