Phoenix Gold (ASX:PXG) has revealed that Zijin Mining Group Co., Ltd (SHA:601899, HKG:2899) has made an unsolicited, highly conditional off-market takeover offer at $0.10 cash per share.
The offer values Phoenix at around $47 million. Phoenix shares closed at $0.098 on Friday.
Phoenix engaged in discussions with Zijin and its advisors over the course of the weekend, including facilitating the satisfaction of some of Zijin’s conditions, in an effort to secure a transaction that is in the best interests of Phoenix shareholders.
At the conclusion of these discussions, Zijin was unwilling to improve the price under its Proposed Offer.
As a result, the Phoenix Board formed the considered view that it could not recommend the Proposed Offer in its current form.
In particular, the Phoenix Board determined that it was inappropriate, on the basis of Zijin’s current Proposed Offer, to limit its ability to solicit and facilitate a superior proposal that could deliver greater value to Phoenix shareholders.
Zijin statement
Zijin has said in a statement that as a result of executing a pre-bid agreement with Phoenix’s largest non-interested shareholder Geologic Resource Partners LLC it now holds a 17.9% relevant interest.
The accepting shareholder is obliged to accept the Proposed Offer, once made, in the absence of a Superior Proposal.
Other substantial shareholders in Phoenix include Evolution Mining (ASX:EVN) which currently holds 9.36% of Phoenix’s shares.
Phoenix currently has a Resource of 4.02 million gold ounces, including a 1.16 million ounce reserve.
Pending General Meeting
Phoenix said in a statement that given the market sensitive nature of the offer together with the potential effect on control of the company, that the board is considering to adjourn the General Meeting of Phoenix shareholders.
The meeting was to vote on a proposed strategic alliance whereby Evolution would lift its interest in the company to 19.9%, scheduled to occur at 10.00am on Tuesday, 23 June 2015.
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