CSM - Consolidated Minerals

[wintermute]

hmmm interesting to see pretty similar figures from my quick and dirty method, with the more complete method used on vote no, gives me a little more confidence that I haven't made any major blunders.

The biggest assumption IMO is that the US $ rate is .88 as if CSM put in more currency hedging (like they had for 06/07) then the figures could potentially be much better than either of the calcs show.

I wasn't certain of what price CSM were getting NOW as opposed to the average, for Chromite so decided not to factor that in, could be the main place where the figures differ. actually I just had a closer look and the nickel on vote no has quite a bit of difference to my calcs, but funnily enough overall, they come out remarkably similar!

Cheers,

Tony.

 

[Rimtalay]

More than just pure speculation

SEEMS Daily Assay put the cat amongst the pigeons with our memo to Territory Resources over its "press speculation" announcement on Monday.

To refresh your memory, here's what happened:

Territory chairman Michael Kiernan told The Weekend Australian that the company would review its bid in the wake of an improved Pallinghurst Resources offer for the carbon steels miner they are both chasing - Consolidated Minerals.

Territory then used a paid-up representative of the company to spread that message to other hacks on the weekend, which was duly reported by some.

The Australian Securities Exchange got wind of what was going on and promptly asked Territory if it was true: was Territory going to change the details of its offer?

Territory managing director Doug Stewart informed the ASX, and therefore the sharemarket, that it was merely press speculation.

What Daily Assay wants to know is what advice did Stewart have in making that statement? Did company lawyers insist that the statement was the right one to make?

It is worth noting that Kiernan was out of the country and on a business trip to India when the statement was lodged with the ASX.

Also, are the rumours true that Stewart is no longer managing director of Territory?

But enough of that for now, Daily Assay's feedback from its readers is that many people are suitably embarrassed by what has gone on.

Daily Assay also wonders if the ASX is asking further questions on the matter.

 

[noirua]

The mining sector has been in a decline this week with continued concerns about the USA. Maybe the decline will be reversed, if not, we may see the $3.30 cash offer for CSM looking a more solid cash bid. TTY has declined to $1.025 from $1.49 at the time of the counterbid.

 

[Rimtalay]

ConsMin shares on the up as new Territory offer looms

Kate Haycock
Friday, 27 July 2007

SHARES in Consolidated Minerals have risen by as much as 14c this morning in anticipation of another bid from Territory Resources, defying widespread falls across the share market and the mining sector today.



The price rise came as ConsMin cancelled the proposed scheme meeting with shareholders to consider the original Pallinghurst Group schemes of arrangement in light of the new offer from the Brian Gilbertson-led consortium.

In a letter to shareholders this morning ConsMin said that after receiving the new offer from Pallinghurst, which replaced the original schemes of arrangement from the private equity group, it had obtained court orders to cancel the August 16 scheme meeting.

ConsMin's share price has risen almost 9% this week from $3.42 on Monday to an intra-day high of $3.74 this morning, a boost of 14c, before settling slighting to $3.71.

This morning's price rise came as news reports in The West Australian said Territory Resources was considering making another offer for the manganese miner and could do so as early as Monday.

A spokesperson for the company confirmed to MiningNews.net this morning that Territory, led by ex-ConsMin head Michael Kiernan, was working with its advisers on a revised bid.

The company is reportedly considering an all-cash offer for the manganese miner.

One of ConsMin's main criticisms of the Territory offer is that the scrip component of the bid is uncertain.

ConsMin has also been critical of the conditions of the Territory offer and the debt requirement Territory would bring to the deal.

The new Pallinghurst offer, which the ConsMin board is backing, is worth $3.30 cash per ConsMin share or $775 million, and is subject to a 50.1% minimum acceptance condition. Pallinghurst is targeting around 60% ownership of ConsMin.

The Territory offer is for $2 in cash for every ConsMin share plus 1.5 Territory shares and is worth $3.56 per share at Territory's share price of $1.04, or around $813 million. Territory is looking for a 90% acceptance rate.

 

[kerosam]

ended high $3.96... something cooking in TTY's office this weekend.

anyone as optimistic as me?

 

[ta2693]

ended high $3.96... something cooking in TTY's office this weekend.

anyone as optimistic as me?

To value a company is very hard. the classic way of valuing is using multiple and NPV. Both methods are very subjective. besides CSM is very unique, it is the only chromite ores producer in Australia. I doubt TTY and pallinghurst know the real value of CSM. The TTY have the support of Noble group and have inside information from them. pallinghurst got the support of CSM broad and have the inside information from them. Both of them is not in a position with full information. They both are reasonable to suspect their opponent knows better than themselves. if they do think in this way, we can expect the price of CSM come into an absurd area which will out of imagination.

 

[Rimtalay]

Another bidder coming

ConsMin defies fall

http://www.news.com.au/heraldsun/story/0,21985,22146066-664,00.html
SHARES in takeover target Consolidated Minerals defied yesterday's market freefall, gaining 10 per cent as heavy trading sparked speculation of a mystery buyer.

The stock gained 36c to close at $3.96, with almost 13 million shares traded - more than ten times the average daily volume traded over the past 12 months.

Territory Resources executive chairman Michael Kiernan yesterday confirmed his company was considering an all-cash offer for ConsMin as an additional alternative to the cash and scrip bid it has already tabled.

The company is likely to make a decision by mid-next week.

"We all want to use the weekend and a couple of days to really consider things because this battle will be won from here with tactics and strategies," he said.

Rival bidder Pallinghurst Resources has a $752 million all-cash offer for ConsMin on the table, which has been recommended by the ConsMin board.

But yesterday's frenzied buying sparked speculation a third party might have entered the fray.

Sources said hedge funds might also be taking a speculative position, with the bidding war heating up.

The soaring stock price sees ConsMin valued at more than $900 million.

The miner has not been valued that high since late 2005 when it was headed by Mr Kiernan.

"This is the second time our group has made ConsMin a billion dollar company," he told BusinessDaily last night.

"We did it once from the inside, now we've done it from the outside."

Territory, which is backed by Hong Kong trading group Noble, Austria's DCM DECOmetal and US bankers Lehman Brothers, is offering $2 in cash and 1.5 shares in Territory for each ConsMin share.

Pallinghurst, headed by former BHP boss Brian Gilbertson, has tabled a $3.30 a share cash bid.

The consortium also includes coal group AMCI, investment bank Investec and US resources investor NGP Mining. South Korean steel giant POSCO has an option to take part.

Pallinghurst last night released it's bidder's statement for the new offer.

A shareholder meeting to consider an earlier offer from Pallinghurst, to be implemented via a scheme of arrangement, has been cancelled.

Pallinghurst is aiming for control of ConsMin with a 50.1 per cent minimum acceptance level.

Territory has a 90 per cent minimum acceptance level.

 

[kerosam]

is there a big surge in volume in another mining company listed in the ASX in the past few days? Yesterday's volume is way too high even when the annoucements for Pallinghurst & Kiernan's takeover were released. the major mining players have retraced a bit... so i guess they are out of the equation(?). maybe another overseas bidder?

 

[Rimtalay]

Heavy ConsMin trade sparks third bid rumour


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.

 

[noirua]

All very interesting. I notice that the UK quoted Investec shares have plunged on bad news this week and maybe the Pallinghurst consortium will have some problems there.
Keirnans TTY stock looks very shakey; What if they plunge further?
Will markets in turmoil determine the outcome as much as the bidders themselves?

 

[Rimtalay]

ConsMins battle
Updated: 07:46, Monday July 30, 2007
The battle for Consolidated Minerals has received a further shake up, with a foreign player believed to have paid big bucks for a seat at the table.

Ukrainian conglomerate Privat Group is believed to have purchased over 10 per cent of ConsMins on Friday, sending its share price well above two current takeover offers.

Privat is the world's biggest manganese alloy producer and according to Fairfax media, the group had planned to snap up at least 5 per cent of ConsMins in order to protect its supply of high grade manganese ore.

If Privat has acquired over ten per cent of Consolidated, it means any potential acquirer would have to negotiate with the Ukraine based company.

The strategic stake could also mark the beginning of an all-cash takeover, rivalling Pallinghurst's and Territory's current bids.

ConsMins is recommending a $3.30 per share bid from Brian Gilbertson's Pallinghurst, and Territory is in the process of revising its cash and scrip bid.

 

[noirua]

A new thread has been started for Territory Resources (TTY) at: https://www.aussiestockforums.com/forums/showthread.php?t=7720&highlight=tty

 

[Rimtalay]

I now understand why Baxter is pushing Pallinghurst deal so hard – he gets GIVEN 3 million CSM shares – a $9.9m Gilbertson gift.
Read page 17 of the bidders statement.
Baxter will rip-off shareholders to get his sweetheart deal.
IT STINKS

 

[kooka873]

RIMTALAY says:
"Baxter will rip-off shareholders to get his sweetheart deal.
IT STINKS"

Absolutely it smells most foul.
Well money speaks all languages doesn't it.
And as for ethics....................???

 

[kerosam]

put a stop loss at $3.65 last week and guess what? some lucky person got my thousand odd shares. i want to get back in. hope i can get back in very soon.

 

[Rimtalay]

Consolidated Minerals stock price slumps as takeover plot thickens

Ukrainian mining firm Privat Group is reported have been the buyer of a 10% stake in manganese miner Consolidated Minerals Ltd that changed hands on Friday, potentially derailing a bidding war for the Australian firm.

Shares in Consolidated Minerals closed at £3.94 on Friday on London ’ s Alternative Investment Market (AIM) but dropped a staggering 61% in early morning trading to £1.53 as reports of Privat Group’s play surfaced. Belize - based Palmary Enterprises Ltd said in a filing to the Australian Stock Exchange on Monday that it had built up a 12.1% stake in Consolidated Minerals, predominately on Thursday and Friday last week. Consolidated said it had not yet been contacted by Palmary. "We don`t know who is behind it," said David Brook, Consolidated Minerals head of investor relations.

Citing no sources, Australia’s Financial Review said Privat wanted at least 5% of the company to protect a source of manganese ore and may have decided to take 10% to force any buyer of Consolidated Minerals to negotiate or even make a bid of its own. Consolidated, which controls one of the world`s richest manganese deposits, is already the subject of competing bids from investment group Pallinghurst Resources and smaller Australian miner Territory Resources Ltd.

"There`s a group out there that now have got a blocking stake towards any potential corporate activity, so the whole process could actually be drawn out a little bit further than what was being anticipated," a dealer said.

Privat is a major customer of Consolidated through its agent DCM DecoMetal, one of the firms backing Territory`s bid, the paper said.

Territory chairman Michael Kernan told Bloomberg News that Privat has discussed the move with DCM and that discussions at this point indicated that Privat is supportive of the company`s offer for Consolidated Minerals.

Territory is expected tooffer an all - cashalternative toits A$806 million (US$708 million)cash and stockoffer for Consolidated Minerals. The Consolidated Minerals board has recommended a A$752 million all - cash offer from Pallinghurst.
(Reuters, July 30)

Privat Group is reported to enter the ConsMins takeover battle.

 

[bigtbigt]

If Baxter is being enticed with 3 million CSM shares, then surely that raises a immediate and serious conflict of interest. That's got to be illegal, or at least a good reason for investors demanding he resigns or turns down that offer from Gilbertson?

I now understand why Baxter is pushing Pallinghurst deal so hard – he gets GIVEN 3 million CSM shares – a $9.9m Gilbertson gift.
Read page 17 of the bidders statement.
Baxter will rip-off shareholders to get his sweetheart deal.
IT STINKS

 

[Rimtalay]

Kiernan claims an ally in Nikopol Andrew Trounson, Resources | July 31, 2007
TERRITORY Resources executive chairman Michael Kiernan yesterday claimed Ukraine's Nikopol as an ally after the ferro-alloy maker surprised everyone on Friday, grabbing a 12 per cent stake in manganese miner Consolidated Minerals.

But the Ukrainians have paid a premium price for their stake, and Mr Kiernan will now be under pressure to significantly raise his bid, with a decision expected later this week.

Mr Kiernan, who was already considering hiking the cash portion of his cash-and-scrip offer for ConsMin, said he was unperturbed by the sudden emergence of Nikopol, which is owned by Ukraine's Privatbank Group.

Nikopol is now in a position to block Territory's offer, which is conditional on securing 90 per cent of ConsMin. But Mr Kiernan has scrapped plans for offering an all-cash alternative, given the prices paid by Nikopol.

The 90 per cent threshhold ensures full control of ConsMin and is a core requirement of Territory's backers, which include US bank Lehman Bros.

That leaves Mr Kiernan little room to accommodate Nikopol without buying its holding.

For rival ConsMin bidder Pallinghurst, Nikopol's move is a major concern as it may encourage ConsMin shareholders to press for a higher offer. But it isn't enough to block its bid which is conditional on 50.1 per cent acceptance.

Pallinghurst is former BHP Billiton boss Brian Gilbertson's private equity house.

"People could see (Nikopol) as a blocking stake, but I see it the other way. It is 12 per cent that will support us," Mr Kiernan told The Australian. "It is better it is the Ukrainians than Brian Gilbertson," he quipped.

Nikopol is close to metal trader and Territory allies DCM DECOmetal, which supplies Nikopol with manganese from ConsMin. DECOmetal sells about 25 per cent of ConsMin's production to eastern Europe, mostly to Nikopol.

According to Mr Kiernan, Privatbank has told DECOmetal that it supports Territory's bid.

"Privat indicated that they were supportive of the Territory initiative," he said.

ConsMin shares yesterday fell 32c, or 8 per cent, to $3.64 having jumped 10 per cent higher on Friday. That values the miner at $830 million.

 

[Rimtalay]

Gilbertson takes aim at his own foot
Jamie Freed, Sydney
July 31, 2007
FORMER BHP Billiton chief executive Brian Gilbertson's criticism of Consolidated Minerals' manganese marketers seems to have backfired in a big way.

Following heavy buying on Thursday and Friday, a Belize-based company named Palmary Enterprises has been outed as the buyer of a 12.2 per cent stake in the Perth manganese, nickel and chromite miner.

Palmary is believed to be linked to Privat, the Ukranian owner of the Nikopol manganese ferro-alloy plant. Privat buys ConsMin's high-grade manganese through Austrian commodities trader DCM DECOmetal to help feed its plant.

Although ore from ConsMin's Woodie Woodie manganese mine in the Pilbara is sold to Hong Kong's Noble Group on a life-of-mine contract, it is believed the DECOmetal sales agreement is due to lapse in about six years.

As head of the Pallinghurst private equity consortium bidding for ConsMin, Mr Gilbertson has criticised DECOmetal and the company's other marketer, Noble Group, for joining a rival bidding consortium led by former ConsMin managing director Michael Kiernan.

"The Noble contract is set in stone," Mr Kiernan said. "The DECOmetal one isn't necessarily solid and secure. My feeling is Pallinghurst will cancel that."

The substantial holding notice filed yesterday shows Palmary has been buying ConsMin shares since July 12, although it did not make large purchases until the end of last week.

"My understanding of it is it is the Ukranian group," Mr Kiernan said. "They did contact DECOmetal last week and say they were going to buy more shares. DECOmetal is in quite regular contact with them."

Mr Kiernan said ConsMin's manganese was essential for the Ukranians because it was high grade and low in phosphorous.

"The Ukranians call it black gold," he said. "I suspect (they bought the stake) to protect their supply channels. That's the way the Ukranians operate. They operate with a sledgehammer."

ConsMin investor relations head David Brook said his company had not yet been contacted by its new substantial shareholder and did not know its identity. ConsMin shares fell 32 ¢ to $3.64.

 

[Aedo]

I now understand why Baxter is pushing Pallinghurst deal so hard – he gets GIVEN 3 million CSM shares – a $9.9m Gilbertson gift.
Read page 17 of the bidders statement.
Baxter will rip-off shareholders to get his sweetheart deal.
IT STINKS

Not quite sure where this comment comes from. On the 16th page of the bidders statement (page number 12) the existing CSM ELTIP (executive long term incentive plan) is described (bold is mine for emphasis):

If Baxter is being enticed with 3 million CSM shares, then surely that raises a immediate and serious conflict of interest. That's got to be illegal, or at least a good reason for investors demanding he resigns or turns down that offer from Gilbertson?

If so yes - but see comment above.