Takeover target Consolidated Minerals Ltd has backed an improved $1.08 billion offer from Palmary Enterprises Ltd, while also advising shareholders that its high stock price is ripe for short term profit-taking.
Takeover target Consolidated Minerals Ltd has backed an improved $1.08 billion offer from Palmary Enterprises Ltd, while also advising shareholders that its high stock price is ripe for short term profit-taking.
ConsMin shares traded up 30 cents to $4.95 today - stretching above Palmary's revised offer of $4.70 a share - giving the company a market value of $1.14 billion.
Palmary increased its bid by 20 cents a share from $4.50.
Ukrainian billionaire and Palmary president Gennadiy Bogolyubov said it was time for shareholders in the manganese and nickel miner to accept its offer.
"ConsMin shareholders have waited long enough," Mr Bogolyubov said.
"ConsMin shareholders should not wait for any further developments.
"They should accept Palmary's superior cash offer now."
But while Consmin recommended the offer be accepted, over a rival bid from Pallinghurst Resources Ltd, the board noted that the stock price was trading above the offer price.
"ConsMin shareholders who wish to realise all or part of their investment in ConsMin shares in the short term - in advance of the close of Palmary's offer - could consider selling their ConsMin shares on market," it said.
The stock price also implies investors believe there may be room for an even higher bid.
Palmary's rival Pallinghurst has not yet ruled out increasing its own offer of $4.50 a share, or $1.03 billion.
Belize-based Palmary today also accelerated its payment terms, so shareholders can receive their funds within 15 days of their acceptances being processed.
Palmary said its revised bid offer represented a 4.4 per cent premium to Pallinghurst's offer.
The takeover battle for ConsMin began in June when Territory Resources Ltd flagged an offer of $1.50 cash and 1.5 Territory shares for each ConsMin shares.
Territory later dropped out and was overtaken by Pallinghurst, which was then joined by Palmary in the race for ConsMin.
In September, ConsMin board recommended an offer from Palmary before siding with an improved offer from Pallinghurst.
It later recommended a revised bid from Palmary, even as Pallinghurst raised its bid to match Palmary.
Pallinghurst's bid had relied on a `top-up' payment, designed to extinguish the difference between the cash component of Pallinghurst's offer and any higher offer by Palmary that might be forthcoming.
Pallinghurst yesterday scrapped the top-up payment after the Takeovers Panel said it gave rise to unacceptable circumstances, and reserved the right to extend or increase its offer.
Pallinghurst director Arne Frandsen was not immediately available for comment today.
Palmary said today the Takeovers Panel decision vindicated its view that the `top-up' structure was anti-competitive, unfair and uncertain.
"Pallinghurst decided not to announce an increase to its offer yesterday," it noted.
"Further, there is no guarantee that Pallinghurst will increase its offer price at any future time."
Palmary is ConsMin's largest shareholder with a 14 per cent stake, while Pallinghurst holds about seven per cent.
Palmary's offer will closes on November 23 while the Pallinghurst bid closes on November 27.
