SYDNEY, Feb. 1 /CNW/ - Allegiance Mining NL today repeated its advice to
shareholders to reject the takeover offer by Zinifex, stating that the implied
premium offered by Zinifex is significantly less than for recent transactions
in the mining sector.
"Allegiance Directors have not accepted the $1.00 a share offer, nor has
our major shareholder, Jinchuan Group Limited," Allegiance Chairman Tony
Howland-Rose said. "It remains unsolicited, opportunistic and inadequate."
Allegiance said that analysis of other recent transactions in the mining
sector showed that the Zinifex offer did not stack up. Allegiance found that
the average premia in recent pending and completed Australian mid-sized base
metal mining transactions is 78% to the closing price of the target company on
the day prior to announcement of the takeover offer, significantly in excess
of the implied premium of 41% Zinifex is offering.
Further, Allegiance has undertaken a benchmarking exercise based on
Xstrata's offer for Jubilee Mines. Allegiance believes that applying the
enterprise value/resources multiples implicit in this benchmarking comparison
to the Allegiance resource base gives an implied range per Allegiance share of
$1.29 to $1.65 per share, which is substantially in excess of the Zinifex
offer. This benchmarking data has been provided to shareholders to assist them
in further understanding the Board's deliberations and recommendation.
Mr Howland-Rose also noted that:
(*) Allegiance shares continue to trade above the Zinifex offer price
(*) In the four weeks since Zinifex's offer has been open it has only
received acceptances of 0.03% (which equates to approximately 207,500 shares
out of a total undiluted share register of approximately 774.9 million
shares), showing the offer had not been well received by shareholders
(*) Recent exciting drilling results vindicate directors' optimism
regarding likely continued growth in the Avebury resource base
(*) Allegiance has received approaches from a number of third parties and
discussions are continuing. No proposal has yet been reached that is capable
of being put forward to shareholders.
"We believe we have an excellent year ahead," Mr Howland-Rose said.
"Allegiance is now well positioned to deliver long term benefits in terms of
revenue and further discovery in the Nickel Province. We believe our
shareholders will hold tight."
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