Zinifex proposing takeover of Wolfden

Australian zinc producer Zinifex (ZFX-A, ZFEXF.-O) has put a cash offer of $3.90 per share on the table for Wolfden Resources (WLF-T, WLFFF-O) that values the Arctic base metal developer at about $345 million.

Wolfden said in an announcement to the market that Zinifex had made a non-binding proposal for the takeover and that the two companies had agreed on a period of exclusive negotiations that would last until March 7. Zinifex would investigate Wolfden’s assets during the period, and Wolfden would not solicit other offers for the business.

The negotiation period can be extended to March 16, and Wolfden can respond to unsolicited offers where a fiduciary duty exists.

There is no definite offer as yet; negotiation of an acceptable transaction is one of the conditions of the agreement. The agreement envisions Wolfden management continuing with Zinifex. Zinifex also has the right to match another unsolicited offer and would get a break fee of 3% of the offer if the deal does not go through.

Zinifex is a zinc producer created out of the assets of failed mining company Pasminco. It holds the Century zinc mine in Queensland and the Rosebery zinc mine in Tasmania. Zinifex recently worked out a deal with Belgian smelter and refiner Umicore (UMICF-O) to combine downstream assets, including Zinifex zinc plants in South Australia, the United States and the Netherlands, in a new public company.