27/03/2008 - 16:01

Olympia rejects Territory offer

27/03/2008 - 16:01

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PERTH-based mineral sands producer Olympia Resources has rejected Territory Resources takeover cash bid, saying its offer was less than half of what it should be according to an independent expert.

Perth-based mineral sands producer Olympia Resources has rejected Territory Resources cash takeover offer, saying its offer was less than half of what it should be according to an independent expert.

Olympia today released its target statement in response to Territory's cash offer of 10c per share made earlier this month, which valued Olympia at $15.5 million.

Independent expert BDO, whose services were obtained for Olympia's target statement, assessed that the preferred value of shares were in the range from 21 cents to 25c.

Olympia managing director Peter Gazzard told WA Business News the higher valuation of the company's shares was not an attempt to force Territory to increase its offer.

"For that price (10c), it's too low. That's what BDO has said so we're recommending against it," Mr Gazzard said.

BDO's valuation of Olympia's shares is around three times the share price prior to Territory's bid. The takeover targets shares have hovered around the 6-9c mark for this year, and have remained steady at 10c following the launch of Territory's bid.

In its target statement, Olympia's directors called Territory's offer as "neither fair nor reasonable" and labelled it opportunistic, however the company did acknowledge the financial support Territory had so far provided.

 

Territory already has a 36.41 per cent holding in Indonesian-focused Olympia, and has a substantial interest in another mineral sands producer, the Tiwi Islands-focused Matilda Minerals.

 

 

 

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