UPDATE 2.35pm: Shares in Perilya soared more than 40 per cent after its controlling Chinese shareholder moved to take out the base metals miner by offering shareholders a healthy cash premium to its trading price.
Zhongjin Lingnan Mining, which already holds 53 per cent of the company, has offered 35 cents a share for the balance of the shares on issue by way of a court-approved scheme of arrangement.
Perilya's managing director Paul Arndt said Zhongjin's proposal offered an attractive premium in a challenging global economic environment epitomised by weak base and precious metal prices and a high Australian dollar.
"The cash consideration of $0.35 being offered provides certainty of timing and value," he said.
He said Perilya would have capital requirements in the short to mid-term, which would likely require a dilutive and discounted equity raising.
"With regards to our employees, suppliers and contracting partners, I note that Zhongjin Lingnan has indicated they intend to continue to fully support Perilya's current operations and to use their financial strength to underpin Perilya's investment and development plans going forward," Mr Arndt said.
Minority shareholders must approve the scheme at a meeting to be held in December.
Zhongjin first invested in the company in February 2009.
Perilya, which is based in Perth, has base metals mining operations in Broken Hill in New South Wales and the Dominican Republic.Perilya shares jumped 9.5 cents, or 43.18 per cent, to close at 31.5 cents.