House of mirrors

Is anything what it seems anymore in the Zinifex bid for Allegiance Mining?

Is anything what it seems anymore in the Zinifex bid for Allegiance Mining?

Institutional investor Lion Selection is taking its complaints about Zinifex’ tactics to the Takeovers Panel, after taking objection to the circumstances in which it accepted the $1 a share offer for 37.9 million of its shares, a near 5.6 per cent stake.

Zinifex and advisors Citi left the announcement to extend the $775 million offer for Allegiance until the last minute on Friday, leaving shareholders to take a punt on accepting or rejecting the bid by 7pm.

Lion Selection, it would appear, got cold feet and accepted, an event that Zinifex has trumpeted as a sign that Allegiance’s defensive wall was crumbling. Previously, Zinifex had accumulated just 0.2 per cent of its target.

But in a statement late Monday (but not quite as late as 7pm), Lion states:

"As Zinifex is aware, Lion has raised concerns regarding the circumstances surrounding the acceptance by it of Zinifex’s offer at 7.00pm on Friday. These concerns will be raised with the Takeovers Panel."

Meanwhile, Zinifex is thumping the table about the extraordinary revelations that an Allegiance employee, apparently its corporate development officer, had cost the company $7.9 million in speculative share trading.

If this allegation holds true, it’s equivalent to nearly four times the company’s total revenue in the first half of the year, and presumably about double its annual sales.

Quite what Jinchuan, the Chinese company often cited as Allegiance’s potential white knight, and other companies rumoured to be examining Allegiance’s books in the data room will make of this is another matter.

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