Consortium enhances takeover proposal for Tampakan project
Source: 27/Aug/2008 Intellasia | Sun Star
Aug 27, 2008 - 7:00:00 AM The bidding war for the world-class Tampakan copper and gold project continues to rage, with a consortium enhancing its takeover proposal on Wednesday that effectively placed major global mining player Xstrata Copper's in an inferior position.
Stanhill Resources Pty Limited, the bid vehicle for the consortium comprising Richard Laufmann, Alsons Corp and Crosby Capital Limited, offered to give Indophil Resources NL shareholders 80% interest in the firm's non-Tampakan assets once Stanhill's proposal succeeds.
This is on top of the Au$1.28 bid per share the consortium earlier offered in response to Xstrata's Au$1 bid to buy out the stakes of Indophil, which is more than a third, in the Tampakan project.
Xstrata, which owns 62.5% of the Tampakan project, eventually matched the Au$1.28 per share offer of Stanhill.
Laufmann, managing director and chief executive of Indophil, described Stanhill's enhanced takeover bid as clearly superior to Xstrata's bid.
"It is compelling. Our offer price is based on the value of a world-class copper and gold deposit in Tampakan while at the same time our proposal acknowledges the hidden value of Indophil's other exploration assets," he said.
Stanhill's additional tender involves one share in Indophil Southern Philippines Holding Corp (New Exploration) for every Indophil share.
New Exploration is a wholly owned subsidiary of Indophil.
It is proposed that, should the offer be successful, New Exploration will hold all of Indophil's exploration assets other than the Tampakan project.
These assets comprise interests in a number of potential and prospective mining projects across the Philippines that have been independently valued at between A$10 million and A$15 million, Laufmann said.
In addition, Stanhill proposes to provide A$8 million of cash to New Exploration for the ongoing exploration, evaluation and development of these exploration assets, he added.
Brian Phillips, Indophil Resources NL chair, welcomed Stanhill's enhanced offer.
"The independent directors [of Indophil] unanimously recommend that Indophil shareholders accept the Stanhill offer, in the absence of a superior offer," Phillips said.
Initial company studies showed that the Tampakan project potentially contains 1.6 million tonnes of copper and 14.6 million ounces of gold at a 0.3 copper cut-off grade. It is said to be the largest undeveloped copper deposit in Southeast Asia.
Last month, Charlie Sartain, Xstrata Copper chief executive officer, asked Indophil shareholders to accept its 100% cash offer of Au$1.28 per Indophil share.
"(Accepting our offer) eliminates funding risk for you, as an Indophil shareholder, Indophil's share of capital expenditure for the Tampakan project may require over US$1.0 billion of capital to be raised by Indophil over the next three to five years, including through rights issues and/or placements, should the Tampakan project proceed," Sartain said in its final bidder's statement.
"It is Xstrata's view that the potential development of the Tampakan project has higher prospects of success with a different ownership structure than currently exists with Indophil as a minority partner. The ownership structure has important implications in regard to the project's development timetable, its financing arrangements, market position and ultimately its value," Sartain added.