PE seen selling $187m Champion Iron block, Aitken Murray on trade

Anthony Macdonald and Yolanda Redrup Aug 2, 2021 – 11.05am

Sydney broker Aitken Murray Capital Partners has landed the biggest block trade of Monday morning, snaffling a $187 million stake in Canadian iron ore play Champion Iron.

The 25 million shares, worth 4.9 per cent of the company, crossed pre-open at $7.50 a share, which was a slim 10¢ discount to the last close.

Fund managers were pointing to Chicago-based private equity firm Wynnchurch as the likely seller, given the length of its holding and paper gains made to date.

Wynnchurch’s WC Strategic is Champion Iron’s biggest shareholder, having invested $16 million for what was a $508 million holding prior to Monday’s trade.

The small discount had investors wondering who bought the stake - it’s not often a private equity vendor can get out at a 1.3 per cent discount without someone being very keen to get its hands on the stock.

It comes as the Michael O`Keeffe backed iron ore miner has been a huge winner for investors since it bought the Bloom Lake Mine in 2016. Champion Iron paid $10.5 million for the asset, which had already seen former owner Cliffs invest $US4 billion and call quits at a time when iron ore was trading below $US50 a tonne.

Champion produces about 8 million tonnes of high grade iron ore a year and last week posted $400 million EBITDA for the June quarter. It is seeking to double production to 15 million tonner or more by this time next year.

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