China's Zhongjin Lingnan to buy rest of Australian precious-metal miner Perilya
04 September 2013
China's Shenzhen Zhongjin Lingnan Nonfemet has offered to buy the stake that it does not own in Perilya, in a deal that values the Australian precious-metal miner at $269 million.
Zhongjin Lingnan, China's third-largest zinc producer, which already holds 53.4 per cent in Perilya, has offered to buy the remaining stock for 35 Australian cents (A$128 million or $115.5 million) per share.
The offer represents a 59 per cent premium to Perilya's closing price on 30 August, when trading on the stock was halted on Australia's Stock Exchange pending further announcement.
Perilya said that its independent directors have unanimously supported the deal in the absence of a superior proposal and added that the offer was in the best interests of shareholders.
"Zhongjin's proposal is priced at a level that represents an opportunity for Perilya shareholders to realise an attractive premium for their investment in a challenging global economic environment epitomised by weak base and precious metal prices and a high Australian dollar," said, Paul Arndt, Perilya's managing director.
Based in Shenzhen, Zhongjin Lingnan first invested in Perilya in 2009 during the global financial crisis through a share placement and formed a strategic alliance. Since then, it has invested in Perilya's Broken Hill operations and in upgrading the company's Port Pirie storage facility.
Perth, Western Australia-based Perilya is a base metals mining and exploration company and is in the top 20 of global producers for zinc and the top 10 for lead production.
The company has three major projects located in Broken Hill in New South Wales, Mt Isa in Queensland and Flinders in South Australia. In 2011, Perilya acquired Canada's GlobeStar Mining Corp, which gave it access to the low-cost Cerro de Maimón copper, gold and silver mine in the Dominican Republic.
It also has exploration projects in Australia and Malaysia. With a market cap of A$2.76 billion, Shenzhen Stock Exchange-listed Zhongjin Lingnan specialises in the production of non-ferrous metals. Its product portfolio includes fine lead ore, fine zinc ore, mixed lead/zinc ore, fine sulphur ore, electrolytic lead, fine zinc, silver, fine cadmium, germanium ingots, germanium dioxide, indium ingots, sulphuric acid, zinc sulphate, section aluminum, curtain walls, steel stripes, nickel hydroxide, zinc powder for batteries, and fibrous nickel powder.