10/11/2006 - 15:57

Shanghai pushes Mt Gibson on Aztec takeover

10/11/2006 - 15:57

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Hong Kong investor Shanghai Merchants Holdings has declared Mt Gibson Iron's hostile takeover offer for Aztec Resources a failure at current levels and has called on the two companies to negotiate an acceptable merger agreement.

Shanghai pushes Mt Gibson on Aztec takeover

Hong Kong investor Shanghai Merchants Holdings has declared Mt Gibson Iron's hostile takeover offer for Aztec Resources a failure at current levels and has called on the two companies to negotiate an acceptable merger agreement.

"At this stage we see the bid as a failure," Shanghai's Sydney-based director Michael Bogue told WA Business News.

"We're putting the onus back on (Mt Gibson) to have a plan to get to 100 per cent."

Mt Gibson currently has a 41 per cent shareholding in Aztec after winning support from one big investor but has failed to entice Aztec's many smaller shareholders.

Despite the hostility between the two companies, which have thrown verbal barbs at each other, Mr Bogue believes each management team has something to offer a merged company.

"It should be run by the best of the available talent within both groups, egos should be checked at the door."

He reaffirmed that Shanghai has strong support for Aztec's board and management.

He added there is "lots of value leakage paying investment bankers".

"We are here to stay, we are planning to be big players in this sector and other sectors."

Shanghai surprised the market last week when it acquired an 8.8 per cent stake in Mt Gibson and a 7.3 per cent stake in Aztec.

It has not commented on the takeover until today, when it announced plans to raise a total of HK$617 million (A$104 million) through a rights issue and a placement.

The company, whose major shareholder is Chinese steel group Shougang, plans to change its name to APAC Resources to reflect its future business focus.

Its announcement described the purchase of shares in Mt Gibson as "consistent with the company's strategy of seeking to undertake commodity trading and make investments to participate in industry rationalization and consolidation where returns are maximized for shareholders".

Mr Bogue said Shanghai was strongly in favour of Mt Gibson and Aztec coming together and wants the two management teams to work together.

"We are in favour of these two companies coming together. We would like them to re-engage with Aztec."

Mt Gibson announced today it was extending its offer for a second time until 24 November.

 

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