Innopac Holdings launches bid to acquire Austalian diamond mining firm

INVESTMENT firm Innopac Holdings has launched a takeover bid for a diamond mining and exploration company.

It has offered to acquire Merlin Diamonds, which is listed on the Australian Stock Exchange, for 28 Australian cents a share - which works out to about A$59.4 million for the entire issued and paid-up share capital of the firm.

This represents a premium of about 37 per cent over Merlin's closing price of 20.5 Australian cents on Wednesday.

Managing director and chief executive of mainboard-listed Innopac, Mr Wong Chin Yong, said that the firm is constantly on the lookout for new businesses and investment opportunities which can enhance shareholders' value.

"Merlin Diamonds, with its advanced exploration tenements and its Merlin Diamond Mine Project's imminent production is the only diamond mine in the northern territory of Australia.

"We also believe that the acquisition of Merlin Diamonds will create many other opportunities in the highly exclusive diamond and gems industry," he added.

The Merlin Diamond Mine Project is one of only three diamond mines in Australia with a high proportion of gem-quality diamonds. Its operations and surrounding tenements total over 2,000 sq kilometres.

Commercial production is expected to start in the third quarter this year with Merlin aiming to produce about 250,000 carats per year by the second year of commercial production, said Mr Joseph Gutnick, executive chairman of Merlin Diamonds.