A naughty hoax?

IT has not been confirmed, but there are suspicions that a recent press release on a hostile takeover bid for Toronto-listed deep-sea explorer Nautilus Minerals could be a hoax.
A naughty hoax? A naughty hoax? A naughty hoax? A naughty hoax? A naughty hoax?

According to a statement made by Gannibal Securities, which was released on the popular website MarketWatch.com on Monday, algorithmic trader Michael Bailey made a hostile offer to acquire all Nautilus shares at C97c each, a 207% premium to the previous day's close.

Interestingly, the statement revealed that Bailey was formerly a member of the Band of Scoundrels, "an elite group of high frequency proprietary traders that successfully shorted Citigroup and profited over $130M in October 2008".

News of the purported hostile takeover sent Nautilus shares up 23% to 58c on Monday, only for them to close down 10% overnight to 52c on volumes of 3.85 million for yesterday, when Nautilus' board said it had not received the unsolicited offer.

"Nautilus has not had any contact with Mr Bailey or any entity controlled by him with respect to this unsolicited offer and has no prior knowledge thereof," the explorer said.

"Nautilus is therefore unable to make any determinations regarding the offer or its validity. The board of directors of Nautilus will consider the unsolicited offer if and when it is formally made."

Suspicions about the validity of the offer have also arisen courtesy of the law firm Fasken Martineau.

The takeover announcement said the firm would represent Bailey in the transaction. But a Fasken spokesperson denied any involvement.

"Fasken Martineau is not involved in any transactions related to Nautilus Minerals or Michael Bailey," a spokesperson told PNGIndustryNews.net.

Nautilus shares nosedived in November after the explorer put its Solwara-1 copper-gold project in offshore Papua New Guinea on hold by halting the construction of its innovative seafloor production equipment to preserve cash.

Commissioning of the seafloor production equipment for Solwara-1 was previously expected in late 2013.

The company is in the process of launching arbitration proceedings against the PNG government, which is a 30% stakeholder of the project.

Nautilus management has previously revealed that the PNG government had not contributed to any project costs since the joint venture was struck in March 2011.

Key stakeholders of Nautilus include Metalloinvest (21.0%), Anglo American (11.1%), Oman-based MB Resources (16.9%) and Teck Resources (4.5%).


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