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Toho Zinc Bid for CBH Deemed Fair
May 17,2010 13:16CST
industry news

May 17 -- An independent expert has deemed as fair a $361.5 million takeover bid for CBH Resources from the lead, zinc and silver miner's largest shareholder.

Japan's Toho Zinc has offered CBH Resources 24 cents per share.

This compares to a rival $310 million offer from Belgium's Nyrstar - its third bid - announced last month.

Nyrstar sought to acquire almost $100 million worth of CBH's convertible notes and all of its ordinary shares at 19.5 cents a share.

"The cash consideration of $0.24 per CBH share is higher than our assessed valuation range of CBH shares on a controlling basis," Grant Thornton Corporate Finance said in a report.

"Accordingly, we conclude that the Toho share offer is fair to the CBH shareholders.

"In addition, the Toho share offer has been formulated at the end of a competitive process and in a fully informed market."

Grant Thornton has estimated the target's worth at between 19.5 cents per share and 23.9 cents per share, which compares to its share price at 11.20am of 23.5 cents, up half a cent, or 2.17 per cent.

"We consider it reasonable to expect that the increase of (the) CBH share price over the last five months can be attributed to the potential benefits arising from the Toho share offer and the previous proposals received from Toho and Nyrstar," Grant Thornton said.

It said Toho's offer was superior to Nyrstar's.

"CBH's shareholder will no longer be exposed to the ongoing risks associated with holding an investment in CBH which includes... volatility in the commodities prices, the uncertainties in relation to the development of the Rasp and Panorama projects, mine development and ramp-up production at the Endeavour mine, production, operational risks, financing risks and currency volatility," Grant Thornton said.

Underground development at the Rasp mine at Broken Hill, in NSW, was suspended in June 2008 with the fall in commodity prices amid the global financial crisis.

The Endeavour mine is north of Cobar, also in NSW, while the Panorama project is south-east of Port Hedland.


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