Chinese mining firm Zijin Mining Group has made a takeover bid for Australia’s Phoenix Gold.
Zijin already holds 8.9 per cent of Phoenix shares, but said that this would increase to 17.9 per cent following the takeover deal.
The Chinese company offered to pay 10 cents per share for Phoenix, valuing it at $47 million.
Zijin said that the deal would only go ahead under deal protections such as no-shop, no-talk, no due diligence and a break free.
Phoenix said after engaging with Zijin and its advisors over the course of the weekend, it could not recommend the proposed offer in its current form.
“In particular, the Phoenix Board determined that it was inappropriate, on the basis of Zijin’s current proposed offer, to limit its ability to solicit and facilitate a superior proposal that could deliver greater value to Phoenix shareholders,” the company said in an ASX statement.
Phoenix shareholders were scheduled to meet tomorrow to vote on whether Evolution Mining would increase its share in the company to 19.9 per cent.
As part of that deal, Evolution was to make a $9 million investment in the company.
It comes after Evolution bought La Mancha Resources' nearby Frog's Leg and White Foil gold mines.
However, today Phoenix said that given the market sensitive nature of Zijin’s offer together with the potential effect on control of the company, the board is considering to adjourn the general meeting of Phoenix shareholders.