PANAUST Limited (ASX:PNA) has urged shareholders to reject an "inadequate" takeover offer by Guangdong Rising Assets Management (GRAM).
GRAM offered the copper miner a revised bid of $1.71 per share, down from its previous offer of $2.30 a unit in May 2014.
The PanAust board and an independent expert from Ernst & Young agreed that GRAM's proposal was "neither fair nor reasonable".
The company says a fair value would be between $1.84 and $2.04 per share.
PanAust chairman Garry Hounsell says the price undervalues the company, and the board is committed to delivering maximised value to shareholders.
"After careful review of the GRAM offer including engagement of an independent expert, the independent directors are of the unanimous view that the offer is inadequate and GRAM should pay more to acquire increased ownership of PanAust," he says.
Hounsell says the offer was announced during a five-year low for copper and gold prices, and fails to recognise the long-term pricing outlook.
He also says increased cash flows from operations in Laos will be used to advance the company's Frieda River mine.
PanAust acquired an 80 per cent stake in the project from Glencore last year and has been focused on delivering a feasibility study.
It has forecast production levels of 125,000t of copper and 200,000oz of gold, with the opportunity for further expansion.
GRAM's offer period is expected to close on May 15, unless withdrawn or extended.
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