Update re: Takeover
November 28 2006 - 3:12AM
UK Regulatory
RNS Number:8076M
Aztec Resources Limited
28 November 2006
Aztec Resources Limited ("Aztec" or "the Company")
28 November 2006
Update re takeover
Aztec has today posted an update letter to shareholders with a revised
recommendation in relation to the takeover offer from Mount Gibson Iron Limited
(Mount Gibson). The content of this letter is set out below.
Aztec has also today issued a joint announcement with Mount Gibson to the
Australian Stock Exchange. The content of this joint announcement is also set
out below.
Copies of the letter to shareholders and joint announcements are available on
the ASX website www.asx.com.au
For further information please contact:
Aztec Shareholder Information Line
Australian Callers: 1800 602 244
International Callers: +61 8 6218 4220
1) LETTER TO AZTEC SHAREHOLDERS
28 November 2006
Dear Aztec Shareholder
Shareholder Update - REVISED RECOMMENDATION
The Board of Aztec Resources Limited (Aztec) has revised its recommendation in
relation to the takeover offer from Mount Gibson Iron Limited (Mount Gibson).
Having seen Mount Gibson's ownership in Aztec increase to 54.14% and after
considering recent developments, on balance, the Aztec board believes that
shareholders should accept Mount Gibson's offer. It is noted that, while the
current market price of Aztec shares is less than the implied price under the
Mount Gibson offer, shareholders can elect to sell their shares on market while
the offer remains open after having regard to their individual circumstances.
Aztec directors have previously recommended to Aztec shareholders that they
should reject the Mount Gibson offer based on a number of factors which are set
out in Aztec's Target's Statement and Supplementary Target's Statements.
However, based on Mount Gibson's current level of ownership and changes in a
number of circumstances surrounding the bid, Aztec directors have considered the
benefits and risks to Aztec shareholders of remaining a minority shareholder in
Aztec as compared to the benefits and risks of accepting Mount Gibson's offer or
selling on market while the bid remains open.
Changed circumstances of which Aztec shareholders should be aware include the
following:
* Following the acquisition of shares in Mount Gibson by Shanghai
Merchants Holdings Limited and Metalloinvest at $0.85 per share and $0.90
per share respectively, Mount Gibson's share price has increased such that
the effective value of its offer to Aztec shareholders equates to 28.6 cents
per share, based on the prior five day weighted average share price of Mount
Gibson, as opposed to 26.3 cents per share when the offer was announced;
* On the basis of its current level of shareholding, Mount Gibson is in a
position to appoint and remove directors from the Aztec board and therefore
dictate the future strategy of your company;
* In recent discussions with Mount Gibson, the following update has been
provided in respect of Mount Gibson's operations:
* The operations at Tallering Peak achieved record ore production in
the September 2006 quarter and Mount Gibson expects to achieve record ore
shipments for the December 2006 quarter, equivalent to an annual shipping rate
of 3 million tonnes per annum;The feasibility study for the development of the
Extension Hill hematite project is on track for completion by 31 December 2006;
and
* Mount Gibson has entered into a further agreement with Sinom
Investments Limited (Sinom) relating to the $52.5 million sale of its and Mount
Gibson Mining Limited's 73% interest in Asia Iron Holdings Limited. Under the
agreement, Sinom has agreed to immediately release to Mount Gibson the first
$40 million being held in escrow, with the balance of $12.5 million to be
released to Mount Gibson by no later than 31 May 2007. As a result of this
agreement, the 30 November 2007 deadline for obtaining environmental approval is
removed and Sinom will no longer be entitled to terminate the original agreement
and return the sale shares if the environmental deadline is not met.
* During the course of the offer, Aztec directors have pursued various
initiatives to improve shareholder value, including seeking rival bids and
exploring alternative transactions with third parties. These initiatives
have not resulted in an alternative proposal being put forward to Aztec
shareholders.
* The Mount Gibson offer has been declared final as to price and free of
all defeating conditions.
In reaching their decision to revise their recommendation, the directors of
Aztec were also cognisant of:
* Capital gains tax rollover relief will be available for qualifying
shareholders if Mount Gibson achieves acceptances for over 80% of shares on
issue;
* The level of Mount Gibson's final shareholding in Aztec will most likely
result in a fall in the liquidity of Aztec shares given the likelihood of
reduced trading volumes which may in turn lead to a possible fall in the
Aztec share price; and
* If Mount Gibson acquires 100% ownership of Aztec, any benefits of the
merged group, as set out in the Mount Gibson Bidder's Statement, will be
available to Aztec shareholders who receive Mount Gibson shares pursuant to
the offer.
In addition, it has been agreed with Mount Gibson, that if Mount Gibson receives
90% or greater acceptances to its offer, Mr Ian Burston, the current Aztec
Chairman, and Mr Peter Bilbe, Aztec's managing director, will be invited to join
the Mount Gibson board.
During the period prior to the closing of the Mount Gibson offer the existing
Aztec board members will remain in place. It has been agreed that Mr Burston
will step down as non-executive Chairman of Aztec, to be replaced in that
capacity by Mr Arnett, currently a non-executive director of Aztec, but
Mr Burston will remain as a non-executive director. In addition, it has been
agreed that Luke Tonkin, Alan Rule and Craig Readhead, current directors of
Mount Gibson, will also be appointed to the Aztec board within the next week
giving the board a total of seven directors.
The directors of Aztec who hold shares in the company intend to accept the offer
for those shares.
Aztec shareholders should be aware that the Mount Gibson offer is currently
scheduled to close at 5pm on Wednesday, 6 December 2006.
Should you have any questions, please do not hesitate to contact the company on
the Aztec Shareholder Information Line.
Yours sincerely
Ian Burston
Chairman
For further information please contact:
Mr Peter Bilbe
Managing Director
Tel: +61 8 9423 0800
Aztec Shareholder Information Line
Australian Callers 1800 602 244
International Callers +61 8 6218 4220
Media Enquiries
Purple Communications
Warrick Hazeldine
Tel +61 8 9485 1254
Mob +61 (0)417 944 616
Email whazeldine@purplecom.com.au
2) Joint Aztec and Mount Gibson ASX & Media Release
28 November 2006
AZTEC DIRECTORS UNANIMOUSLY RECOMMEND MOUNT GIBSON OFFER
MOUNT GIBSON DECLARES OFFER FINAL AS TO PRICE
Mount Gibson Iron Limited (Mount Gibson) (ASX Code: MGX) is pleased to announce
that the board of Aztec Resources Limited (Aztec) has today unanimously agreed
to recommend acceptance of Mount Gibson's offer for all the ordinary shares in
Aztec (Offer).
In addition, the Aztec directors have confirmed they will accept the Offer in
respect of their own Aztec shares.
The recommendation follows discussions between the boards of Mount Gibson and
Aztec and their advisers, subsequent to Mount Gibson's announcement last week
that it had secured acceptances in excess of 50% of Aztec.
In this regard, the directors of Aztec note a number of the concerns raised in
Aztec's Targets Statement have been addressed recently and in the course of
discussions. In particular:
* Significant stakes in Mount Gibson have recently changed hands at prices
equal to, or in excess of, recent trading levels, including approximately 61
million shares purchased by Shanghai Merchants Group at 85 cents per share,
and 109.7 million shares acquired by Metalloinvest at 90 cents per share;
* Mount Gibson's share price has increased such that the effective value
of its offer to Aztec shareholders equates to 28.6 cents per share, based on
the prior five day weighted average share price of Mount Gibson, as opposed
to 26.3 cents per share when the offer was announced;
* Mount Gibson's Tallering Peak operations achieved record ore production
in the September 2006 quarter and expects to achieve record ore shipments
for the December 2006 quarter equivalent to an annual shipping rate of 3
million tonnes per annum;
* The feasibility study for the development of the Extension Hill hematite
project is on track for completion by 31 December 2006;
* Mount Gibson has entered into a further agreement with Sinom Investments
Limited (Sinom) relating to the $52.5 million sale of its and Mount Gibson
Mining Limited's 73% interest in Asia Iron Holdings Limited. Under the
agreement, Sinom has released the first $40 million being held in escrow to
Mount Gibson, with the balance of $12.5 million to be released to Mount
Gibson by no later than 31 May 2007. As a result of this agreement, the
30 November 2007 deadline for obtaining environmental approval is removed
and Sinom will no longer be entitled to terminate the original agreement and
return the sale shares if the environmental deadline is not met; and
* Mount Gibson's offer is free of all defeating conditions.
It has also been agreed that in the event that Mount Gibson receives 90% or
greater acceptances to its offer, Mr Ian Burston, the current Aztec Chairman,
and Mr Peter Bilbe, Aztec's managing director, will be invited to join the
enlarged company's board.
During the period prior to the closing of the Mount Gibson offer the existing
Aztec board members will remain in place. It has been agreed that Mr Burston
will step down as non-executive Chairman of Aztec, to be replaced in that
capacity by Mr Arnett, currently a non-executive director of Aztec, but Mr
Burston will remain as a non-executive director. In addition, it has been agreed
that Luke Tonkin, Alan Rule and Craig Readhead, current directors of Mount
Gibson, will also be appointed to the Aztec board within the next week giving
the board a total of seven directors.
Mr Bilbe commented: "Having considered recent developments which have seen Mount
Gibson's ownership in Aztec increase to 54.14%, the Aztec board, on balance,
believes that shareholders should accept Mount Gibson's offer."
Luke Tonkin, Managing Director of Mount Gibson said: "We welcome the
recommendation from the Aztec board and look forward to welcoming Aztec
shareholders who accept the Offer onto the Mount Gibson register."
"The Offer represents good value to Aztec shareholders. I would also add that
Aztec shareholders who accept the Offer will continue to have potential upside
exposure to the development of, and commencement of production at, Aztec's
Koolan Island project through their holding in Mount Gibson, and the opportunity
to participate in the potential re-rating of the combined group."
Under the Offer, Aztec shareholders are being offered one Mount Gibson share for
every three Aztec shares held. Aztec shareholders who accept the Offer will be
issued with their Mount Gibson shares as consideration within three days of
their acceptance being processed.
Mount Gibson has also declared its offer final with respect to price. The offer
is scheduled to close at 5:00pm Perth Western Australia time on Wednesday 6th
December 2006.
Yours sincerely,
MOUNT GIBSON IRON LIMITED AZTEC RESOURCES LIMITED
Luke Tonkin Peter Bilbe
Managing Director Managing Director
Enquiries: Mr Luke Tonkin / Alan Rule Mr Peter Bilbe
Telephone: +61-8-9426-7500 +61-8-9423-0800
Peter Bacchus Robert Sennitt
Managing Director Division Director
Morgan Stanley Macquarie Bank Limited
Telephone: +44-778-994-3482 Telephone: +61-2-8232-8286
Chris Fraser
Director
Citigroup
Telephone: +61-2-8225-4634
This information is provided by RNS
The company news service from the London Stock Exchange
END
OUPPUGGUGUPQUBR
Aztec Res. (LSE:AZR)
Historical Stock Chart
From May 2024 to Jun 2024
Aztec Res. (LSE:AZR)
Historical Stock Chart
From Jun 2023 to Jun 2024
