takeover of cen, page-5

Time is ripe for Rum Jungle adventure.

by:John Beveridge
From:Herald Sun
February 14, 2013


YOU don't need to only witness the Australian indices smash through the 5000 barrier to know that animal spirits are once again awake and prowling around the share market.

Rum Jungle Resources, long one of my favourite local phosphate plays, yesterday launched a takeover bid for neighbour Central Australian Phosphate, offering 20c cash and one Rum Jungle share for every 20 Central Australian Phosphate shares.

Central Australian shares rapidly rose a third to just 0.1c short of the imputed 2.1c a share offer price with directors issuing the standard warning to shareholders not to take any action until they had examined the offer documents.

It is one of those rare takeovers in which the entire logic of the bid can be shown on one simple diagram that shows Central Australian's Arganara phosphate deposit sitting hard up against Rum Jungle's Barrow Creek phosphate deposit.

If combined within Rum Jungle, the deposit would be in the order of half a billion tonnes of phosphate with a good prospect of that reaching the magic billion tonne mark with some more exploration.

That total resource size is particularly handy with phosphate deposits due to the ability to mix different grades, apart from the obvious industrial logic of having a single processing mill, production camp and railway spur line to the nearby railway to Darwin.

Rum Jungle chief executive David Muller said the company had decided to offer cash rather than a full share bid because it was keen not to dilute its shareholder base too much.

In a takeover battle, shares in the acquirer can come under pressure so this could be an ideal time to top up your Rum Jungle holdings. The fight will take a while to sort out, but, whatever happens, Rum Jungle is on the way to becoming a potash and phosphate miner and the buy call is retained.

http://www.heraldsun.com.au/business/in-the-black/time-is-ripe-for-rum-jungle-adventure/story-e6frfinf-1226577459482