Chinese group faces competition for PanAust

Copper is much in demand: Chinese groups are leading the race. Photo: Arsineh HouspianTakeover target PanAust has revealed it is talking to several groups over a possible acquisition bid, signalling Chinese group Guangdong Rising could have competition in its chase for the copper miner.

Guangdong Rising owns just less than 23 per cent of PanAust, and in May outlined a preliminary offer to buy the rest, under a proposal that valued PanAust at $1.46 billion.

PanAust wants a higher price than the $2.30 a share offered by Guangdong Rising and has allowed the Chinese group access to data rooms to perform due diligence.

On Tuesday, PanAust confirmed that several groups had also been welcomed in to consider a bid for the miner. ”The company has held discussions with a number of parties and has established a data room to allow [Guangdong Rising] and other interested parties to undertake due diligence,” PanAust said in a statement.

PanAust managing director Garry Stafford said the interested parties had included rival copper miners as well as financial institutions. ”We’ve engaged with copper producers, strategic groups that want exposure to copper production, we’ve engaged with financial groups as well, sometimes when you go through these processes you get surprised the interest you get from a group you didn’t have on your list,” he said.

The comments suggest a takeover for PanAust remains a possibility, despite pessimism from some investors who feared the Guangdong Rising bid was losing steam more than two months after it was made public. Those fears helped send PanAust shares 4 per cent lower on Monday, but the stock closed 4¢ up at $2.19 on Tuesday. Chinese groups have dominated the race for copper exposure in recent times, with the China Molybdenum company paying a full price for Rio Tinto’s Northparkes mine in NSW last year, while Hong Kong listed MMG has struck a preliminary deal to buy the giant Las Bambas prospect in Peru. Lundin Mining has also confirmed it is looking to acquire a copper asset.

PanAust is not the only Australian copper producer in play, with OZ Minerals fielding interest over its prospective Carrapateena deposit near Coober Pedy.

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