Xstrata is funded by Glencore to do takeovers.The new...

Xstrata is funded by Glencore to do takeovers.
The new Consolidated Minerals will be funded by Pallinghurst ... an investment group
Apparently it has about $1 billion ready to spend.
Probably the first to go will be Jabaru, that is why the price jumped 6% on friday...that and nickel price I suppose.

Read on.....

Private equity moves into mining
Andrew Trounson
February 24, 2007

PRIVATE equity finally moved on the mining sector yesterday, as global heavyweight and dumped BHP Billiton boss Brian Gilbertson returned to Australia to lead a $625 million offer to take 60 per cent of Perth manganese, chromite and nickel miner Consolidated Minerals.
Backed by Russian oligarch Viktor Vekselberg and US private coal giant AMCI, Mr Gilbertson is offering to put his aggressive deal-making credentials and his backers' deep pockets behind a push to make Consmin into a multi-billion-dollar miner by pursuing acquisitions in Australia and globally.
After five months of haggling, the South African-born Mr Gilbertson has finally won over a Consmin board, led by chairman Dick Carter, which has now unanimously backed the deal.

Consmin - advised by JP Morgan - and Mr Gilbertson are billing the deal as a partnership that provides Consmin with a financially strong cornerstone investor. They aim to mimic the strategy at Xstrata, which has been on an acquisition binge, with the support of 40 per cent shareholder Glencore, the Swiss commodity trading giant.

Consmin chief executive Rod Baxter said the aim was to create the next "resources champion" in Australia, filling the hole left by the takeovers of MIM, Normandy and WMC, the last of which was bought by BHP for $9.2 billion.

Mr Gilbertson was coy about the sort of deals he was targeting but noted that "one of the advantages of being a private company is that you can get on and do the (deals) and then present them to the public company to look at".

"It is my professional judgment that we can build Consolidated Minerals into a position of strength in the Australian market," Mr Gilbertson said.

But both Mr Gilbertson and Mr Carter are facing some early opposition as some shareholders dismissed the deal as too cheap with no control premium.

While most shareholders are excited at Mr Gilbertson coming on to the board, some are complaining they are being asked to give up control largely just for Mr Gilbertson's savvy deal-making.

"You are asking us to accept in a leap of faith," EL&C Baillieu resources analyst Ray Chantry said at Consmin's investor briefing.

Mr Gilbertson's London-based resources fund, Pallinghurst Resources, is the bidding vehicle and is offering Consmin shareholders $1.38 a share in cash and two shares in the newly constituted company for every five shares held.

Based on Consmin's last closing price before the deal of $2.25, the offer values the miner at just 3c more, $2.28 a share.

But Mr Carter said the offer was effectively a 32 per cent premium to Consmin's one-month average share price ahead of speculation of a bid emerging in October, which took the stock up as high as $2.52.

But some shareholders weren't buying that, noting that nickel prices have risen substantially since October and would also be supporting the share price. "It stinks," said one fund manager who declined to be named.

But Southern Cross Equities backed the deal as "attractive", given its valuation of $2.15 a share.

Under the merger Mr Baxter, a fellow South African, will stay on as CEO, but Mr Gilbertson's right-hand man, Arne Frandson, who, he said, brought a "viking" attitude to deal-making, will be appointed executive director to head strategy.

The deal is pitched as a scheme of arrangement, with a vote expected in late May. Some 47 per of Consmin is held offshore, mostly in Europe.

Consmin closed unchanged at $2.25.