Copper Strike calls Kagara takeover bid as highly opportunistic
By Ricky Roxas | October 13, 2010 8:02 PM EST
Base metal miner Copper Strike Ltd (ASX: CSE) advised its shareholders on Wednesday to hold off any action on the $14.3 million takeover proposal pushed forward by Kagara Ltd (ASX: KZL), calling the offer as highly opportunistic.
Kagara made known yesterday its intents to acquire the base and precious metal mining firm but Copper Strike countered on the next day that suitor's bid was inadequate as it added that following the initial review of its directors, "the quantum and timing of the offer is highly opportunistic."
In its statement, Copper Strike said that it is appropriate for now that company shareholders defer any action on the matter and seriously asses the company directors' decision of disallowing Kagara from gaining ownership in the company in the absence of an appropriate offer price.
The Copper Strike advisory also reminded the shareholders that once they have received the formal offer from Kagara, the company directors will then proceed to "further advice to shareholders including their formal recommendation."
Analysts said that Kagara is aiming to acquire Copper Strike to further buttress its existing asset base in Queensland, with the suitor company confirming that a successful takeover would result to the heightened development of the target's Einasleigh copper deposit and other assets.
The possible merger, added the analysts, would provide for Karara steady and rich reservoir of raw ore for processing on the zinc producer's Mt Garnet and Thalanga multi-metal treatment plants in Queensland.
As of 1418 AEDT on Wednesday, Copper Strike shares were trading up by two or 21.05 percent to 11.5 cents while Kagara shares also improved a bit by half a cent to 69.5 cents.
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