Chinese miner in Perilya bid

Australian miner welcomes Zhongjin's $269.3 million takeover proposal.

China's number three zinc producer is looking to buy Australian miner Perilya (PEM) in a deal that values the mining company at $269.3 million.

Shenzhen Zhongjin Lingnan Nonfemet Co Ltd already owns 53.4% of Perilya, which operates base- and precious-metal mines in Australia and the Dominican Republic.

The company said it wanted to buy the rest of the stock for 35 Australian cents a share.

The offer represents a 59% premium to the stock's closing price on August 30, when Perilya's shares entered a trading halt on the Australian stock exchange.

It also represents a 109% premium to the its volume-weighted average price over the past three months, the company said.

Perilya's Managing Director Paul Arndt welcomed the offer.

"Zhongjin's proposal is priced at a level that represents an opportunity for Perilya shareholders to realise an attractive premium for their investment in a challenging global economic environment epitomized by weak base and precious metal prices and a high Australian dollar," Mr Arndt said.

Perilya said its independent directors would unanimously support the proposal if an independent report found the deal to be in the best interest of minority shareholders, and no other offers emerged.

A deal would also need Australian and Chinese regulatory approval.

Zhongjin Lingnan first bought into the Australian firm in early 2009 through a share placement and strategic alliance agreement, which included financial support during the global financial crisis and access to Zhongjin's market intelligence on China.

Perilya said it expected shareholders to vote on the proposal at a meeting in December.

Perilya's share price has surged 43.2% to 31.5 cents at 1431 AEST.