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Australia’s Tietto Minerals has urged its shareholders to accept Zhaojin Mining’s offer that values the firm at A$733 million ($480.41 million) or sell shares on-market if the market price is not materially different to the offer price.
Shares of the Perth-headquartered gold miner slid 2.2% to A$0.66 after the announcement on Tuesday, heading for their biggest drop in more than a week.
Tietto said two of its major shareholders might have accepted the offer, given the Chinese suitor’s voting power in the company was “in excess of 42%” as of April 29.
Zhaojin declared its bid to be unconditional on April 24, making it impossible for Tietto shareholders who had already accepted the offer to now withdraw their acceptance.
“Based on these acceptances, it appears clear that certain of Tietto’s key shareholders have accepted into Zhaojin’s offer such that there is now a real risk that Zhaojin can control the composition of Tietto’s board,” the company said in a statement.
Tietto said its directors still believe that Zhaojin’s offer was opportunistically timed and materially undervalued the company.
The gold producer had previously rejected the A$0.68 per-share offer from Zhaojin Mining unit Zhaojin Capital for shares it does not already own in the Australian firm.
Subsequently, Zhaojin Mining kept raising its stake in Tietto, with an April 26 filing showing that the Chinese firm’s voting power had increased in the company to 23.22%.
If the deal goes through, the takeover would help Zhaojin Mining expand its business operations overseas. Tietto has already received approval from Australia’s Foreign Investment Review Board.
($1 = 1.5258 Australian dollars)
(By Poonam Behura; Editing by Subhranshu Sahu)
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