The much-anticipated takeover bid for Consolidated Minerals Ltd by the Michael Kiernan-chaired Territory Resources Ltd has met a negative response from the stock market, with both companies' share prices falling today.
The much-anticipated takeover bid for Consolidated Minerals Ltd by the Michael Kiernan-chaired Territory Resources Ltd has met a negative response from the stock market, with both companies' share prices falling today.
ConsMin, which announced it would defer the Thursday shareholder meeting that was to decide on a takeover bid from Pallinghurst Resources, fell 2.9 per cent or 10 cents to $3.35 at end of trade today after receiving the then-$966 million counter offer from Territory.
Meanwhile Territory, which had offered $2 cash and 1.5 Territory shares for each ConsMin share, fell 3.2 per cent or 3.5 cents to $1.06 after coming out of a trading halt this morning.
The Territory offer is more generous than the Pallinghurst Resources-led bid of $1.68 cash for every share plus two shares in a new company that values ConsMin at around $643 million.
"We've put a fully funded offer and our credentials on the table to enable the consolidated Minerals' shareholders to decide on the value," Territory chairman Michael Kiernan said.
"This is a fully funded bid, we have some $620 million of committed, signed off and agreed cash to go ahead with this offer."
Territory's bid is backed by commodity traders Noble Group, DCM DECOmetal International Trading and investment bank Lehman Brothers.
Mr Kiernan said if the ConsMin proposal was successful, a future merger with vanadium hopeful Precious Metals Australia - of which Mr Kiernan is chairman - would be the next logical step to building a diversified mining house.
"I've always been a person that likes to get specialist commodities and put them under one roof and the major shareholders of PMA are more than happy to sidle up and be under the one roof of Territory," Mr Kiernan said.
"So I think that you'll probably find that sometime over the next couple of years or so or twelve months or so that there will be a wedding down the road."
PMA is developing the Windimurra vanadium project in Western Australia. Vanadium is a steel hardening agent.
Mr Kiernan confirmed Territory's earlier proposal to sell off ConsMin's nickel division and shareholdings in a number companies, including base metal miner Jabiru Metals Ltd, which could net up to $560 million.
Territory said its takeover offer delivered certain value through the $2 cash component and the opportunity to participate alongside Lehman Brothers and the original team that developed ConsMin into a leading resources company.
"I will continue in the role of chairman of Territory, and the board and management composition will be announced before completion of the offer," Mr Kiernan said.
Territory said its offer had the backing of more than 20 per cent of ConsMin shareholders.
ConsMin said it would defer a shareholder meeting that was to decide on the takeover bid from Pallinghurst Resources, after receiving the formal Territory offer.
Shareholders of the manganese and nickel miner were expected to meet on Thursday to vote on the Pallinghurst offer.
Pallinghurst is led by former BHP Billiton chief executive Brian Gilbertson.
ConsMin chairman Dick Carter said the decision to defer the meeting would allow shareholders more time to consider the competing offers.
Mr Kiernan was managing director of ConsMin before being ousted by chairman Dick Carter a year ago.