Nautilus Minerals says has had no contact with hostile bidder

Tue Jan 8, 2013 7:49am EST
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Jan 8 (Reuters) - Nautilus Minerals Inc, which hopes to develop the world's first underwater copper-gold mine off Papua New Guinea, said it has had no contact with a little-known investor who announced a hostile C$238 million ($241 million) takeover bid for the company but would consider a formal offer.

Michael Bailey plans to offer 97 Canadian cents per share for Nautilus, according to a statement released by boutique financial advisory firm Gannibal Securities on Monday.()

The offer, which helped push up Nautilus's stock price by 25 percent, represents a premium of 67 percent to Nautilus's closing stock price of 58 cents on Monday.

The statement did not say how Bailey would fund the bid.

Nautilus said on Tuesday it became aware of the offer only through the statement from Gannibal, which said it was advising Bailey, and could not make any determinations about its validity.

The statement described Bailey as an experienced Canadian investor and algorithmic trader who is a former member of a high frequency proprietary traders group called the Band of Scoundrels that earned $130 million by successfully shorting Citigroup Inc in October 2008.

Gannibal, whose homepage has a link to Bailey's Twitter account, could not immediately be reached for comment. ()

Nautilus said on Nov. 13 that it had stopped assembling mining equipment for its Papua New Guinea project to save cash as it worked to resolve a dispute with the government.

Its shares fell by a third that day.   Continued...