By Jane Goldsmith
April 21, 2015
ASX-listed PanAust has shunned a $1.1 billion takeover bid from China’s Guangdong Rising Assets Management (GRAM), dubbing the price “inadequate”.
The Laos-based copper and gold producer advised shareholders to “take no action” in response GRAM’s unsolicited $1.71 per share offer, proposed on 30 March.
The price was a premium to the $1.22 figure PanAust shares traded at before the bid, but well below a previous $2.30 proposal from GRAM, made in 2014.
In mid April, PanAust managing director Fred Hess formally advised against shareholder acceptance, stating the company’s share price averaged above the GRAM offer price, indicating the company had been undervalued.
“Whilst investor sentiment towards the resources sector remains variable and driven by short?term factors, at PanAust we are confident that we have the right assets in the right commodities to drive long term value for our shareholders,” Dr Hess said.
“When faced with any takeover offer, PanAust shareholders should expect the offer price to fairly reflect this long?term value potential. We believe GRAM’s current offer price falls short of this level.”
However, PanAust did not rule out mergers into the future.
“While we believe the current offer is inadequate, we are open to engagement and to considering all proposals which we believe are in the best interests of our shareholders,” company chairman Garry Hounsell said.
PanAust has two base and precious metal producing mines in Laos and several other pre-development opportunities in the country, as well as Papua New Guinea and Chile.