Caledon Resources and suitor GRAM sign new non-solicitation agreement
8:45 am by Sergei Balashov
Caledon recommended a 112 pence per share takeover bid from GRAM's wholly owned Australian subsidiary Bidco back in September 2010 Caledon Resources (LON:CDN, ASX:CCD) and potential offeror Guangdong Rising Asset Management (GRAM) have signed a new non-solicitation agreement, giving GRAM more time to obtain the necessary approvals to acquire Caledon.
Caledon recommended a 112 pence per share takeover bid from GRAM's wholly owned Australian subsidiary Bidco back in September 2010. Caledon�s share price has doubled from 50 pence at that time to the current 102 pence.
"The board of Caledon continues to believe that GRAM's possible acquisition would be very positive for Caledon's shareholders and employees. We are in regular contact with GRAM and acknowledge and appreciate their efforts in progressing approvals with the Chinese authorities," said managing director of Caledon Mark Trevan.
Earlier this month, GRAM received a key approval from the state-owned assets supervision and administration commission (SASAC), whose endorsement of the deal prompted the companies to enter into a new non-solicitation agreement on the same terms. The previous agreement was signed in the end of January and expired a month later.
Under the terms of the agreement, Caledon has agreed not to ask the panel to impose a deadline for GRAM or Bidco to announce a firm intention to make an offer for Caledon.
The new agreement will expire on 15 June this year if the acquisition announcement has not been made by that time. GRAM is currently working with the Chinese authorities to obtain all of the necessary approvals within the period covered by the agreement, which would enable it to make the announcement and proceed with the acquisition.
The outstanding regulatory approvals include approvals for outbound investments from the national development and reform commission and the ministry of commerce along with an approval for the remittance of foreign exchange out of China.
Caledon operates the Cook coking coal mine in the Bowen Basin of Queensland, Australia.
During the final quarter of 2010, Caledon produced 170,000 tonnes of raw coal, 5 percent more than 2009. Coking coal production reached 116,000 tonnes and 27,000 tonnes of thermal coal were produced, representing growth of 6 and 79 percent respectively. Caledon sold 116,000 tonnes of coking coal and 38,000 tonnes of thermal coal.
