Heavy Consmin Trade Sparks Third Bid Rumour

The Age

Saturday July 28, 2007

Jamie Freed, Sydney

A THIRD player appears to have entered the hotly contested battle over Perth miner Consolidated Minerals, with heavy share trading and price gains on Thursday and Friday.

The manganese, nickel and chromite miner has already received two takeover offers in recent months, one from a private equity group led by former BHP Billiton chief executive Brian Gilbertson and another led by former ConsMin managing director Michael Kiernan.

Mr Gilbertson's Pallinghurst consortium has offered $3.30 a share for ConsMin. Mr Kiernan's company, Territory Resources, has offered $2 plus 1.5 Territory shares, valuing ConsMin shares at about $3.50.

Although nearly every resource stock took a pounding yesterday following heavy losses on Wall Street, ConsMin shares rose 10 per cent to close 36? higher at $3.96.

Nearly 13 million shares changed hands, compared to an average of 1.85 million a day over the last three months.

When added to Thursday's heavy trading, the turnover on ConsMin's register approached 10 per cent in two days. The heavy buying was led by Southern Cross Equities on Thursday and by Patersons Securities yesterday, but the brokers were very active on both days.

Sources said the purchaser was likely to be an overseas party and indications were it was a corporate player rather than a fund.

ConsMin is an attractive takeover target because it controls about 10 per cent of the world's high-grade manganese at its Woodie Woodie mine in Western Australia.

Mr Kiernan said Territory was reviewing its bid and it might make an increased offer next week. "The bottom line is we've got two or three different alternatives with which we can go forward," he said.

Mr Kiernan said one of the alternatives was likely to be an all-cash bid, and it was possible Territory could raise the cash component of its current bid.

In a Bidder's Statement released yesterday, Pallinghurst provided more details of its funding for the offer. US coal group AMCI has agreed to provide at least $474.4 million, a Pallinghurst fund would provide $181.9 million from money it has not yet raised, investment bank Investec will contribute $87.1 million and NGP Mining would add $132.4 million.

South Korean steel maker Posco has an option to take over part of AMCI's stake.

Territory's bid is backed by commodities traders Noble Group and DCM DECOmetal along with US investment bank Lehman Brothers.

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