September 30, 2009 - 11:49AM A $3.54 billion bid by a Chinese state-owned company to take over Felix Resources Ltd is fair and reasonable, an independent valuer says.
Felix Resources independent expert, Deloitte, found the fair market value of Felix to be in the range of $3.3 billion to $3.7 billion.
"We are of the opinion that the Proposed Scheme is fair and reasonable to shareholders," the Deloitte report says.
"It is therefore in the best interests of shareholders," it said.
The announcement comes after the Australian coal miner last month announced plans by China's Yanzhou Coal Mining Co to buy 100 per cent of Felix.
The proposed $18.05 per share offer would result in the largest Chinese takeover of an Australian company to date.
"In the absence of a superior offer, all Felix directors who hold Felix shares intend to vote in favour of the scheme and continue to unanimously recommend shareholders do the same," Deloitte said.
Under the deal Felix shareholders would be offered a cash payment of $16.95, plus dividend payments of $1.00 and scrip in Felix subsidiary South Australian Coal Ltd.
If the it goes ahead Felix would become a wholly-owned subsidiary of Austar Coal Mine Pty Ltd, which would be wholly owned by Yanzhou.
Felix would be delisted from the Australian Securities Exchange.
Before the Felix buy-out goes ahead it still has a number of hurdles to clear, including approvals from Australia's Foreign Investment Review Board (FIRB), government agencies in China and two-thirds of Yanzhou's shareholders.
When the deal was announced Felix said it expected FIRB approval before the end of September.
On September 14 Yanzhou resubmitted its application to FIRB, saying the move was done "in order to facilitate the approval processes by the relevant regulatory authorities for the acquisition".
Felix said the move should not alter the timetable for the deal.
China's investments have become politically charged, with some Australian politicians questioning the influence of the communist country's government over mining companies of which they are a major customer.
FIRB executive director Patrick Colmer recently said the government was more comfortable with foreigners keeping stakes in undeveloped projects below 50 per cent, and below 15 per cent in major producers.
At 1321 AEST on Wednesday, shares in Felix Resources were trading up 31 cents, or 1.84 per cent, at $17.20.
FLX Price at posting:
$17.17 Sentiment: None Disclosure: Not Held
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