A third bidder has officially emerged for Consolidated Minerals, with Belize-based Palmary Enterprises, launching an off-market bid worth $3.95 per share (which values ConsMin at just under $900 million).

Palmary is believed to be an investment vehicle for Ukrainian based group, Privatbank, which, The Australian noted has interests in “steel, energy, chemical, banking and media assets in Russia, Ukraine, Romania and the United States, and partly owns the world’s second largest ferro-alloy producer, Nikopol.”

Only yesterday, Brian Gilbertson’s Pallinghurst group increased its offer from $3.30 to $3.60 per share. However, that increase looks to have been quickly gazumped by Palmary’s bid, which has been pitched at a 55.2% premium to the mid-range of the independent expert’s report.

Palmary has accumulated a 14.36% stake in ConsMin (most of which was accumulated in the days leading up to 27 July 2007) and is being advised by heavyweights, UBS and Mallesons.

One wonders what Rod Baxter and the ConsMin board will do now, having staunchly backed Pallinghurst’s series of offers. With a current bid of $3.95 on the table, and three other interested parties (including Pallinghurst, Michael Kiernan’s Territory Resources and Norwegian group Tinfos), the ConsMin board’s initial acceptance of Pallinghurst’s $2.30 merger offer is looking more foolish each day.

The ConsMin board effectively recommended shareholders accept a price which was 71 per cent less than what Palmary offered today.

The investors who frantically sold into Pallinghurst’s $3.30 bid several weeks ago would also be feeling a little disappointed.

Disclosure: The writer holds an economic interest in the performance of ConsMin shares.

Peter Fray

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