rdi proposal, page-10

Australasian Resources' Palmer Proposes Buyout (Update1)

By Rebecca Keenan

July 24 (Bloomberg) -- Australasian Resources Ltd., seeking to build a A$2.7 billion ($2.6 billion) iron ore mine in Western Australia, said majority shareholder Clive Palmer wants to buy the shares he doesn't already own in the company for A$327 million.

Australasian received a takeover proposal from Resource Development International Ltd., a company also controlled by billionaire investor Palmer, Perth-based Australasian said today in a statement to the Australian stock exchange. Palmer already controls 66.37 percent of Australasian.

Australasian is working with China's Shougang Corp. to raise funds to develop the Balmoral South iron ore project. Prices for iron ore have increased fourfold since 2001 on demand led by China, generating record profits for producers.

Resource Development may offer shares worth A$2.20, a premium of 94 percent to yesterday's closing price, Australasian said. The proposal values Australasian at A$973 million ($935 million). Australasian rose as much as 45.5 cents, or 38 percent, to A$1.65 on the exchange and traded at A$1.60 at 10:03 a.m. Sydney time.

The deal is conditional on Resource Development trading its shares on the Hong Kong stock exchange. It wants to sell up to A$5 billion of shares through an initial public offering later this year and may also consider listing on the Australian stock exchange, according to Australasian.

To contact the reporter on this story: Rebecca Keenan in Melbourne at [email protected]