Cash Return For Lion Investors
Sydney Morning Herald
Friday May 16, 2008
THE investment house Lion Selection is poised to reveal plans to return cash to shareholders after agreeing to sell two of its main assets.
Lion, which remained in a trading halt yesterday after agreeing to sell its stakes in the Cracow goldmine and Indophil Resources, is expected to outline its strategy to investors this morning. The Herald understands the strategy includes the planned sale of a 20.5 per cent stake in the Zambian nickel miner Albidon, held by Lion and two of its African funds, although no deal over the stake will be announced today. It is thought Zinifex and Xstrata have expressed interest in the Albidon stake.The sale of Lion's stakes in Cracow, Indophil and Albidon could fill its coffers with more than $200 million in cash, in addition to the $75 million it had on hand on March 31.Lion had previously planned to hoard cash to exercise a pre-emptive right over Newcrest Mining's 70 per cent stake in the Cracow mine and transform itself from an investment company into a mining operator.But as foreshadowed in the Herald, Lion yesterday accepted an $80 million offer from Beadell Resources for its 30 per cent stake in Cracow. Beadell, a junior explorer, will have control of the entire Cracow mine after raising equity and debt to fund the $280million purchase."We were fully expecting Lion to pre-empt," Beadell's managing director, Peter Bowler, said. "I think Lion is really keen on Cracow and was expecting to pre-empt. One of the things that thwarted their plans was the hostile takeover bid from Indophil."Lion is trying to fend off Indophil's scrip bid. There is a belief Indophil would have disposed of many of Lion's assets to fund its share of developing the Xstrata-operated Tampakan copper project in the Philippines.A return of cash to shareholders will offer an alternative to Indophil's offer, subject to approval at a meeting of Lion shareholders.
© 2008 Sydney Morning Herald
