could be 'game on', page-4

Hanlong, Sundance haggle over bid price
BY: SARAH-JANE TASKER From: The Australian August 08, 2012 12:00AM

AFRICA-focused Sundance Resources remains locked in tense negotiations with China's Hanlong, which reportedly is pushing for a 30 per cent drop on its original takeover bid.

The target is expected to update the market tomorrow on the talks, which will be closely watched for signs of how the Chinese are now approaching deals.

Perth-based Sundance announced last week that it was in talks with Hanlong over a "reasonable acquisition" price, after the suitor got provisional approval from China's top economic planner on the condition the bid price was reviewed.

An offer of 50c a share was proposed in July last year, but the Sundance board rejected it.

A revised bid of 57c was backed by the target in October, valuing the company at $1.7 billion.

There was market speculation last week that Hanlong was looking at returning to its original 50c bid, but industry talk yesterday suggested it was now as low as 40c.

Sundance suspended its shares from trading last week pending the outcome of the negotiations. Its shares last traded at 33c.

The company would not comment on the industry speculation yesterday but it is understood the board would not accept 40c and that that figure is not being entertained by the company.

Hanlong took a stake in Sundance early last year when it purchased a 16 per cent interest from the estate of mining mogul Ken Talbot at 44c a share.

It is understood Sundance has an alternative plan if price talks are not successful and that it is not prepared to do a deal at any price.

It appears Hanlong has reneged on the original signed agreement and is using the provisional approval by China's National Development & Reform Commission to push for a lower offer price.

The conditions placed on Hanlong by the top economic planner also included Hanlong securing equity and debt funding to develop the $5bn project.

Since the deal was first signed last July, Sundance has increased its resource base by 50 per cent and received mining approvals for the projects.

http://www.theaustralian.com.au/business/mining-energy/hanlong-sundance-haggle-over-bid-price/story-e6frg9df-1226445155550