Australian shares extended their losing streak to seven sessions on Tuesday, with sentiment hit by a renewed plunge in Centro Properties Group CENTRO PROP15 January,2008 15/01/2008 19:10 Sydney, Australia.Value
CNP.AX , 0.600, -0.260, -30.230%) and as financial stocks eased on ongoing U.S. economic worries.
Analysts said investors were nervous ahead of earnings reports later this week from big U.S. financial firms that have been hit by the fallout from the subprime mortgage crisis.
"Even though (problems have) been telegraphed, people are waiting to make sure there's no further surprises there," said Tony Russell, a senior equities adviser with ABN AMRO Morgans.
The benchmark S&P/ASX 200 index (.AXJO S&P/ASX 20015 January,2008
unofficially ended down 0.33 percent, or 20 points, at 5,960.0, retreating after early gains of over 1 percent in early trade which followed a strong performance on Wall Street.
Lead and zinc producer Zinifex Ltd insists its takeover offer for nickel hopeful Allegiance Mining NL remains compelling, despite the target announcing a 10 per cent increase in resources at its flagship Avebury project.
Allegiance and its largest shareholder, China's Jinchuan Group Ltd, recently denounced Zinifex's unsolicited bid of up to $744.93 million as not reflecting of the true value of the company.
In a statement, Allegiance chairman Tony Howland Rose said the resource increase demonstrated the "enormous potential value still to be unlocked" in and around Avebury.
However, Zinifex said it had already factored the upside in the resource into its bid.
"In formulating the valuation behind Zinifex's offer, Zinifex assumed that sufficient resources would be discovered to increase the mine life beyond its current nine year life and expand the processing plant beyond its current 900,000 tonnes per annum design capacity," Zinifex said in a statement.
Zinifex previously said it had sufficient financial clout to inject the required capital into the project, implying that Allegiance's pockets were not deep enough for undertaking.
"... expansions and extensions will also require considerably more capital to be invested in exploration and development in the area," the predator said in its statement.
"Zinifex's offer is compelling for Allegiance shareholders, providing an immediate opportunity to realise a substantial all-cash premium for their investment.
"This is particularly so when shareholders take into consideration the current volatile and uncertain market conditions."
Allegiance has advised shareholders to take no action and make no decision regarding Zinifex's bid, which it described as "opportunistic".
Zinifex's offer is 90 cents per Allegiance share but will be increased to $1.00 per share if the suitor acquires more than 30 per cent of its target, or gains board approval.
The closing date for the two-tiered offer is February 8.
Allegiance is expected to release its target's statement on Thursday.
Production at Avebury is scheduled to commence in the first quarter of 2008.
Allegiance's shares closed 2.5 cents higher to $1.07 on Tuesday while Zinifex's shares finished eight cents weaker to $10.67.
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