05/07/2007 - 09:56

Kiernan welcomes ConsMin due diligence

05/07/2007 - 09:56

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Territory Resources Ltd chairman Michael Kiernan has welcomed a decision by Consolidated Minerals Ltd to allow the company to conduct due diligence, despite what he says is its highly restrictive nature.

Kiernan welcomes ConsMin due diligence

Territory Resources Ltd chairman Michael Kiernan has welcomed a decision by Consolidated Minerals Ltd to allow the company to conduct due diligence, despite what he says is its highly restrictive nature.

ConsMin granted access until July 13 after receiving further information clarifying key aspects of Territory's revised indicative proposal.

"Even though we are not granted equal access to due diligence as was provided to the Pallinghurst consortium and despite the tight timeframe, we have a team of very capable advisors at the ready to commence due diligence" Mr Kiernan said

But the potential target had turned the tables on its predator, granting access to conduct due diligence on the condition that ConsMin's advisers will also be given access to undertake due diligence on Territory.

Last week, ConsMin refused Territory's request to undertake due diligence, arguing that an indicative bid of $1.50 in cash plus 1.5 Territory shares for every ConsMin share lacked strategic vision and certainty.

But Territory turned up the heat on ConsMin by sweetening its proposal and securing up to $450 million in financing from commodity traders Noble Group and DCM DECOmetal International Trading and investment bank Lehman Brothers.

In addition, Territory's due diligence process must be finalised by July 13.

Territory is offering a choice of $2 per share plus one Territory share or three Territory shares for every ConsMin share, subject to due diligence.

Noble and DECOmetal have committed to provide $200 million, comprising $175 million at $1 per Territory share and a $25 million loan, while Lehmann would provide up to $250 million in bridging finance.

ConsMin continues to back a $382 million bid by a Pallinghurst Resources-led consortium, headed by former BHP Billiton Ltd chief executive, Brian Gilbertson.

Pallinghurst is offering $1.68 in cash for every share in the manganese and nickel miner, plus two shares in the new ConsMin.

 

 

The full text of a company announcement is pasted below

Territory Resources Limited (ASX: TTY), an independent Australian resources group, has received advice from the Board of Consolidated Minerals (ASX: CSM) to allow access to conduct limited due diligence.

Subject to the execution of confidentiality agreements, limited due diligence (confined to legal, accounting, taxation and financial issues) will be made available to Territory up until 13th July 2007.

Territory Chairman Michael Kiernan said access for the limited due diligence was welcome notwithstanding it is highly restrictive in nature.

"Even though we are not granted equal access to due diligence as was provided to the Pallinghurst consortium and despite the tight timeframe, we have a team of very capable advisors at the ready to commence due diligence" Mr Kiernan said

Territory's major shareholder and investor, the Noble Group's (SGX: NOBL) CEO Richard S Elman said there was a strong opportunity to deliver value for Territory shareholders.

"We are in a very good situation with regard to resources and we have the ability to support the growth of Territory into a substantial and important steel industry supplier of all the various ingredients that go into the steel industry" Mr Elman said.

Territory has agreed to grant reciprocal due diligence access on an equivalent basis to that being offered to Territory.

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