25/09/2015 - 15:05

Phoenix rejects Evolution offer

25/09/2015 - 15:05

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Phoenix Gold shareholders will be hoping for an improved takeover offer from Evolution Mining, after a proposal to acquire the business was knocked back by Phoenix directors today.

Phoenix rejects Evolution offer
Phoenix Gold's Castle Hill project near Kalgoorlie.

Phoenix Gold shareholders will be hoping for an improved takeover offer from Evolution Mining, after a proposal to acquire the business was knocked back by Phoenix directors today.

In a statement, Phoenix said Evolution’s headline offer of 12 cents per share was ‘substantially below’ an independent expert’s valuation of the company, and has recommended shareholders reject the $56.4 million offer.

An independent expert valued Phoenix at between 15.6 cents and 24.4 cents per share when the company rejected a 10 cents-per-share takeover offer from China’s Zijin Mining Group, just prior to the Evolution offer.

“The directors consider that the Evolution offer is inadequate and does not provide sufficient consideration to Phoenix shareholders, particularly in the context of the strategic benefits the Phoenix assets offer to Evolution and its recently-acquired Mungari operations,” Phoenix chairman Dale Rogers said.

The company said the directors remain in discussions with Evolution with respect to the adequacy of the offer.

“Evolution has not stated that the offer is final and will not be increased,” the company said.

“The Evolution offer does not fairly reflect the value of the Phoenix assets. Accepting the offer will diminish (our) shareholders’ exposure to any potential increase in value that the Phoenix assets offer.

“If (shareholders) accept the Evolution offer, their shareholding in Evolution will represent a very small proportion of the total Evolution shares on issue.”

Evolution and Zijin both recognise value in gaining control of Phoenix in order to integrate the junior explorer’s tenements with their existing operations near Kalgoorlie.

Phoenix shares were unchanged at 12.5 cents at the close of trade, while Evolution shares closed 3 per cent higher to $1.19 each.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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