Australian zinc and lead miner CBH Resources is recommending a revised joint venture deal and bid for part of the company from its largest shareholder Toho Zinc Japan.
The move follows a suspension of the company’s shares after Toho unveiled a rival offer to a $290 million bid from Belgium’s Nyrstar.
CBH said it preferred the Toho proposal as Nyrstar's bid was conditional on acquiring all CBH's convertible notes and was also superior in terms of de-leveraging the company. Toho had earlier advised CBH that it would not support the Nyrstar bid as CBH’s major shareholder with a 23 per cent stake. It also holds just over 50 per cent of outstanding loan notes.
The Toho deal also includes a sale of 50 per cent of the Rasp zinc project at Broken Hill for $57.5m, to a joint venture between the two parties for the ownership and development of the mine.
Toho will make a partial takeover offer for up to 49.9 per cent in CBH at 25 cents a share valuing Toho’s offer for the shares it does not already own at $76 million. The offer compares with Nyrstar's revised offer of 19.5c for the whole of the company.
"Toho's revised proposal will provide CBH shareholders with the best of both worlds," CBH managing director Stephen Dennis.
"Shareholders will be able to receive significant near term gains on a portion of their CBH shares, and they will also have the opportunity to participate in the future growth of the company through the development of the Rasp project and the planned increase in production at the Endeavor Mine.
"The de-levering of the company, along with Toho's undertaking to support CBH in financing the Rasp Project, will also ensure that this important new mine is brought quickly into production."
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