Shares in gold and copper miner PanAust have rocketed after a heavily reduced takeover bid by Chinese company Guangdong Rising Assets Management.
Shares in the Australian-listed Laos-focused takeover target closed 49 cents, or 40 per cent higher at $1.715.
The Chinese state-owned resources company has made a $1.71 a share offer for PanAust, valuing the company at $1.11 billion.
That is well below the $2.30 a share proposal it made for PanAust in 2014, which valued the company at nearly $1.5 billion.
However, that was a non-binding, indicative proposal unlike the formal offer announced on Monday.
It also indicates a continued desire by China to control more commodities globally despite slowing economic growth.
Guangdong said in a letter to PanAust shareholders that the offer provided them with the certainty of cash when there was a range of risks to its share price.
That included PanAust's need to spend significantly and possibly raise equity to develop its Papua New Guinea project, which would dilute share value.
"I believe that the likelihood of another bidder emerging with a superior proposal is low, given the substantial cash premium offered and our current relevant interest in PanAust shares," chairman Wei Zhue said.
The offer is a 40 per cent premium to PanAust's closing share price of $1.225 before Monday.
Guangdong already holds 22.5 per cent of PanAust, meaning it would pay $859 million for the rest of it if its offer succeeds and it would control the company once it passed 50 per cent.
PanAust said it was considering the offer.
However, PanAust noted "that GRAM (Guangdong) made a non-binding and indicative takeover proposal in April 2014 at a higher price, however, no formal takeover proposal was subsequently received by PanAust".
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