“We are proposing a true merger of equals and the ratio of 3.1931 Oxiana shares for each Zinifex share reflects this,” said Mr. Cusack and Mr. Mansell, in a joint statement.
“The merger terms reflect our Boards' mutual judgment that relative market valuations are the appropriate basis to ensure both groups of shareholders receive equivalent value in the proposed merger. We took into account the volume-weighted average prices of both companies over the period during which the Boards of Oxiana and Zinifex have been actively considering the proposed merger, due diligence and the prospects of each company,” the Chairmen said.
The Chairmen continued, “We believe the proposed merger will create value for both Oxiana and Zinifex shareholders. The combined company will have a major presence in both the zinc and copper markets, both of which are strongly leveraged into the rapidly expanding economies of Asia and elsewhere in the developing world. In addition, the combined group will have a very strong balance sheet and will be wellequipped to succeed in any market environment.”
Mr. Hegarty, who has led Oxiana since 1996, said, “Oxiana and its people have been single-minded in their commitment to building a major mining house and the proposed merger with Zinifex is a huge step towards the achievement of that objective.”
Mr. Michelmore said, “Similarly, since it listed in 2004, Zinifex has been a great success story, generating exceptional shareholder value through the contribution of a team of dedicated people. The opportunity to combine two of Australia’s best-performing mining companies is very exciting.”
“The combination makes strong strategic sense,” he continued, “The two companies have largely complementary asset portfolios and development pipelines and the merged entity will be very well positioned to benefit from the strength of demand for commodities we see stretching out for many years.” Andrew Michelmore added, “In addition to the physical assets, both companies have highly-skilled workforces and management teams, which in combination will make the merged entity a resources powerhouse.”
“Andrew, who will become the CEO of the merged entity, is the right person to take the combined company forward,” noted Owen Hegarty. “Andrew has extensive experience in the mining industry, both in Australia and internationally and I am personally delighted that he has enthusiastically accepted the challenge of leading the merged entity through the next stages of its growth.”