PanAust rejects buyout bid by China’s Guangdong Rising
June 5, 2014 Category Automotive Metals & Minerals, Metals
Guangdong Rising Assets Management, a state-owned Chinese investment group, offered to take control of PanAust in a cash bid that values the Laos-focused copper producer at AUD1.5 billion. PanAust rejected the bid as being too low and agreed to give Guangdong Rising, its largest shareholder, access to financial information. Some investors fear the deal will fail. Buying PanAust would give Guangdong Rising control of mines in Laos as well as the Frieda River project in Papua New Guinea, described as one of the largest undeveloped copper and gold deposits in the world. PanAust agreed last year to buy Glencore Xstrata’s stake in Frieda River in a deal it expects to be concluded before September, estimating the development costs at up to USD1.8 billion. PanAust expected to attract “significant interest” from other groups and the producer’s shareholders would expect it to talk to any parties that made competing proposals, Managing Director Gary Stafford said. Offering Guangdong Rising access to information was intended to help “facilitate them perhaps coming back with a better offer, but doesn’t indicate that they are close, or nearly there”, Stafford said. “It remains to be seen how high they are prepared to go.” China’s demand for assets may help fuel a doubling in the number of mining deals worldwide this year, according to Jay Leary of law firm Herbert Smith Freehills. Copper, iron ore and coal were the top targets, he said.
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