Indophil Takes A Swipe At Lion
Sydney Morning Herald
Thursday March 20, 2008
INDOPHIL Resources' managing director, Richard Laufmann, has been threatening to do something big since joining the cashed-up Philippines copper and gold group.
But few picked that Indophil would be bold enough to make a $340 million scrip bid for its 25.7 per cent shareholder, Lion Selection. It is a case of the aggressive cub, Indophil, planning to take over the pride from Lion, after becoming frustrated it could not strike a friendly combination deal. As a resources investment company, Lion is generally a player in takeovers, not on the receiving end of an offer. Indophil's proposed offer is 2.5 of its shares for each Lion share or a higher offer of 2.7 of its shares on it getting to 90 per cent acceptance and gaining an endorsement from Lion. It values Lion at between $1.65 and $1.78 a share or between $315 million and $340 million. Lion's last sale before the announcement of the bid was $1.35, implying a premium in the bid of between 22 per cent and 32 per cent.Mr Laufmann - the former WMC executive who convinced Lihir Gold to take over Ballarat Goldfields, where he was managing director - said Indophil had explored the potential to combine the companies. "During these discussions, Indophil proposed various combinations of the two companies," he said. "Nothing concrete eventuated and Indophil now considers that Lion shareholders should have the opportunity to decide whether to support a combination of the companies." Watching from the sidelines, initially, is Xstrata's boss, Mick Davis. Indophil's key asset - apart from $100 million in cash - is a 37.5 per cent stake in the Tampakan copper and gold project in the southern Philippines. Xstrata is operator and 62.5 per cent partner in the project, one of the world's biggest undeveloped deposits of copper and gold. Xstrata has ranked Tampakan as the biggest development project in its copper portfolio and it has long been assumed that when the timing was right, Xstrata could seek to either take over Indophil or bid for its Tampakan stake. Lion's managing director, Robin Widdup, has analysed more mining takeovers than most, first as a research manager of resources at the former JBWere & Son and then as the founding managing director of Lion. The prospect of Lion turning the tables on Indophil with a bid of its own is considered possible. Frustrated that its share price continually traded below the net asset backing provided by its long list of resources investments, Lion has been working on making the switch to a mining company itself. Part of the process resulted in it taking over one of its cub investor groups, which had acquired a 30 per cent stake in the Cracow goldmine in Queensland. Lion has said it planned to exercise its pre-emptive rights over the 70 per cent of Cracow that Newcrest Mining has up for sale, continuing its switch investor to miner.
© 2008 Sydney Morning Herald