SYDNEY, Jan. 17 /CNW/ - Allegiance notes Zinifex's ASX Release dated 17
January 2008 and provides the following comments:
Zinifex's offer has now been open for 2 weeks and to date Zinifex has
received acceptances of just 0.01% (which equates to approximately 77,500
shares out of a total undiluted share register of approximately 774.9 million
Since 20 December, Allegiance shares have consistently traded above the
$1.00 per share maximum offer from Zinifex, let alone the $0.90 per share
currently being offered to shareholders. On 17 January 2008, Allegiance closed
at $1.065 per share.
Due to the Board's REJECT recommendation, for shareholders to receive the
maximum $1.00 per share offer, Zinifex will need to obtain a 30% relevant
interest in Allegiance.
With current acceptances of just 0.01% and the overwhelming support for
the Allegiance team since the offer was announced, including from Allegiance's
major shareholder and customer, Jinchuan, there is a significant risk that
Zinifex is unsuccessful in achieving a 30% relevant interest. In this
instance, Allegiance shareholders would only receive $0.90 per share, which is
significantly below Allegiance's recent trading price of $1.065 per share.
With the offer unconditional, shareholders should be aware that any
acceptance by them will be FINAL and shareholders will lose the ability to
accept any rival offer or to sell their shares on market for more than the
price offered by Zinifex.
The Directors of Allegiance believe that this offer is unlikely to be
Zinifex's last move. From statements carried in recent media coverage it
appears this view is also shared by other major Allegiance shareholders and
Mr Tony Howland-Rose, Chairman of Allegiance said: "The Zinifex offer
does not compensate shareholders for what the Directors believe to be the true
value of Allegiance.
"This view is supported by shareholders representing a combined interest
of 21.5%, who have either confirmed the offer is inadequate or that they will
REJECT the offer. Our major shareholder, customer and partner, Jinchuan, has
publicly stated that they believe there to be significant further upside in
Allegiance and therefore the $1.00 per share offer is not reflective of the
true value of the company. Indeed, based on Zinifex's announcement yesterday,
99.99% of shareholders have followed the Board's recommendation so far. And it
is far from certain that Zinifex's offer price, now $0.90, will reach the
$1.00 referred to by Jinchuan.
"With production to commence shortly, our exciting nickel province, our
talented and dedicated people and long-term partner, Jinchuan, we are very
confident in our ability to develop Allegiance into a world class mining
"For these and all the other reasons we set out in our Target's Statement
yesterday, we reiterate our recommendation to shareholders: REJECT the Zinifex
offer and simply IGNORE all documents sent to you by Zinifex" Mr Howland-Rose
For further information:
For further information: Media: Ross Thornton, Third Person, +61 418 233
062; Stuart Carson, Third Person, +61 403 527 755