Aztec Resources Ltd has recommended its shareholders reject a takeover offer from Mount Gibson Iron Ltd.
Aztec Resources Ltd has recommended its shareholders reject a takeover offer from Mount Gibson Iron Ltd.
The full text of an announcement is pasted below
Aztec Resources Limited notes Mount Gibson Iron Limited recently dispatched its Bidder's Statement to Aztec's shareholders relating to its unsolicited and conditional Takeover Offer for Aztec.
As outlined in Aztec's letter to shareholders on 29 August 2006, Aztec's Directors consider that the Bidder's Statement lacks the necessary disclosures Aztec Shareholders require to fully assess Mount Gibson and its Offer.
On 6 September 2006, in response to actions by your Aztec Directors, Mount Gibson released a Supplementary Bidder's Statement providing Aztec's Shareholders with additional and necessary information that Aztec considers should have been provided in the original Bidder's Statement. Aztec Directors continue to seek further information and disclosures from Mount Gibson.
After a detailed assessment of the Offer, Aztec's Directors unanimously recommend that shareholders REJECT the inadequate offer from Mount Gibson.
The reasons for this recommendation are as follows:
- The loyalty of Aztec shareholders is set to be rewarded as Aztec's Koolan Island Project commences production of iron ore. The Aztec management team has made significant progress in developing the Project over the past year and remain on track for first production in December 2006 and first shipments of iron ore in early 2007.
- The Offer is inadequate. It does not reflect the strategic importance of the Koolan Island Project to Mount Gibson.
- The Offer is opportunistically timed to take advantage of Aztec in the period prior to the commencement of production at Koolan Island.
- The Aztec Board holds serious concerns about the risks associated with the Mount Gibson shares being offered to Aztec shareholders as consideration under the Offer. In particular:
§ Mount Gibson's ability to sustain production and shipping of three million tonnes per annum from its Tallering Peak operation is unproven.
§ The significant risks associated with the development of Mount Gibson's Extension Hill Hematite Project. At this time only a desk top study has been completed.
§ Mount Gibson's management team have continued to underperform their own operational and financial projections for the company.
Since the Mount Gibson Offer was announced, Aztec has been approached by a number of other parties interested in pursuing opportunities with Aztec. Aztec will continue to explore these opportunities and will keep you informed should any developments arise.
The Aztec Board urges shareholders to continue to support Aztec's management as it works to bring the Koolan Island Project into production for the benefit of all Aztec shareholders.
Shareholders are advised to disregard all documents sent to them by Mount Gibson until they receive Aztec's Target's Statement which contains Aztec's detailed response to the Mount Gibson Offer.
