THE board of independent directors of base metals company Perilya has unanimously accepted a takeover proposal from major shareholder Zhongjin Lingnan Mining.
Perilya, owner of the historic Broken Hill mine in NSW, confirmed in early September it had received the takeover offer from its current 53.4 per cent state-owned shareholder.
Each share available for purchase was valued by Zhongjin Lingnan at $0.35, in a deal totalling $269.3 million.
Perilya stated the offer represented a substantial premium to the historical trading price of company shares, including a 59 per cent premium to the closing share price of $0.22 on the date that a trading halt occurred, and an 85 per cent premium to its one-month volume-weighted average price.
The company’s unanimous support was granted due to the absence of a superior proposal and a determination that the scheme would be in the best interests of Perilya shareholders.
Despite the decision, closing the deal remained dependent on several key conditions including the approval of minority shareholders; approval of the
Australian Foreign Investment Review Board; Chinese regulatory approval; and confirmation from independent experts engaged by Perilya that the proposal was in the best interests of shareholder minority.
Zhongjin Lingnan bought into Perilya at the depth of the 2009 Global Financial Crisis, in a strategic alliance that ensured Perilya’s survival; at the time, Perilya was on the verge of closing several key Broken Hill silver mines.
The Chinese zinc major stated its commitment to Perilya, through its “willingness to financially support the Broken Hill operations through its difficult transition in late 2008 [and] early 2009” and its “support for the development of the Potosi/Silver Peak mine at Broken Hill in an environment of adverse metal prices and difficult economic conditions”.
A wholly-owned subsidiary of Shenzhen Zhongjin Lingnan Nonfemet, Zhongjin Lingnan is China’s third largest zinc producer, holding major zinc and base metal operations in Australia and the Dominican Republic.