11/04/2012 - 11:00

Panoramic, Minemakers takeovers turn hostile

11/04/2012 - 11:00


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Panoramic, Minemakers takeovers turn hostile

Hostility surrounding takeover offers by Minemakers and Panoramic Resources has escalated, with the merit of independent expert reports and company valuations being challenged in both cases.

Perth-based companies Minemakers and Panoramic have both questioned the results of expert finings into their takeover offers for Magma Metals and UCL Resources, respectively.

Minemakers, which launched a $22 million takeover bid for UCL in February, today queried the approach taken by Grant Thomson in its independent expert’s report on the bid.

The explorer and developer believes the report lacks reference as it has not placed sufficient weight on key information in forming its opinion on the offer.

Minemakers said this information included the historical market value of UCL shares, the risks to UCL shareholders if the offer does not proceed or the benefits of a combined entity

“As a result, Minemakers questions the basis for Grant Thornton’s opinion and the relevance of its opinion for UCL shareholders,” the company said in a statement.

“UCL shareholders should consider carefully whether they agree the approach taken by Grant Thornton.”

The company also took aim at UCL’s target statement, saying that while it tries to convey the company will be better positioned if the bid is not successful, shareholders should consider the benefits of the offer relative to the risks of not proceeding.

Also today, Base metals explorer Magma Metals again dismissed nickel miner Panoramic Resources’ hostile $40 million takeover bid for the company, saying it “fails to stack up”.

Magma chairman Max Cozjin described the offer as “unfair and unreasonable”, and urged company shareholders not to accept the bid.

Panoramic argued in a March 29 announcement that shareholders should accept the offer because an independent expert’s value range for Magma “does not stack up”.

The nickel miner added that the bid’s premium to Magma’s pre-offer price justified acceptance, while its shares were also a less risky option to holders.

In response, Mr Cozjin said: “it is the value of the Panoramic offer – not the expert’s valuation range – that fails to stack up”.

Mr Cozjin explained that Panoramic’s share price has fallen more than 13 per cent since the announcement of the offer, and that its implication for the value of the offer continues to be of concern.

“Furthermore, the directors do not accept the argument that the change in risk profile that would arise from Magma shareholders being part of an enlarged Panoramic group, justifies accepting what they consider to be an unfair and unreasonable offer,” Mr Cozjin said.

To this point, Magma shareholders agree with the company’s directors, with Panoramic’s offer receiving acceptances of just 7.8 per cent at the time of the announcement.

Magma’s largest shareholder, Anglo Pacific Group, has increased its stake in Magma from 13.5 per cent to 17.4 per cent since Panoramic’s bid.

Meanwhile, Magma yesterday advised that it has started proceedings in the Supreme Court of Western Australia to “enforce its rights” in relation to an agreement with Crescent Gold over the Laverton nickel project.

Magma owns 100 per cent of the rights to conduct exploration and mining for nickel, copper and platinum group metals from a large group of tenements in the Laverton area held by Crescent.

However, the tenements are currently the subject of Supreme Court action between Crescent and Indago Resources regarding a royalty deed signed by the companies

The royalty deed includes provisions that conflict with the agreement between Magma and Crescent.

Magma said it had pursued proceedings in the Supreme Court against Crescent and Indago to protect its rights.

“Panoramic has sought to persuade Magma shareholders to accept its unfair and unreasonable offer principally because in Panoramic’s opinion, the independent experts value range for Magma ‘does not stack up’, the implied bid premium to the pre-offer price of Magma shares justifies acceptance, and holding Panoramic shares is less risky than holding Magma shares,” Magma chairman Max Cozjin said in a statement.

“The Magma directors’ firm view is that it is the value of the Panoramic offer – not the expert’s valuation range – that fails to stack up.”


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