dmc takeover?

http://au.news.yahoo.com/thewest/business/a/-/wa/7049205/cape-lambert-bid-for-dmc-labelled-low-ball/

Cape Lambert bid for DMC labelled 'low-ball'
KATE EMERY, The West Australian April 12, 2010, 7:09 am

Cape Lambert bid for DMC labelled low-ball

The West Australian

DMC Mining's defence against suitor Cape Lambert Resources has received a boost after a London-based analyst suggested the 40-a-share bid price was a 'low-ball bid'.

DMC unofficially began its defence on Friday with the release of positive early drilling at its Mayoko iron ore project in the Republic of Congo, on which it has previously placed an exploration target of up to 1.3 billion tonnes.

Although the DMC board has yet to either endorse or reject the cash bid from its 36.2 per cent shareholder, it was keen to talk up the drill results as corroboration for the assumptions that underpinned its exploration target.

DMC owns 80 per cent of Mayoko, where historic drilling has identified an inferred resource of 33.1 million tonnes at 55.5 per cent iron.

However, in a note to clients, Ambrian analyst Caedmon Marriot suggested that a resource of more than 250 million tonnes could be reached in 12 to 18 months.

Initiating coverage on the resources junior, Mr Marriot said Cape Lambert's bid came weeks after initial drilling had tested the geophysical target but before the company had a result to release assay results.

In our view, the bid is clearly opportunistic, and we see immediate value in the company, some 30 per cent in excess of the last bid price, Mr Marriot said.

DMC shares last traded at 40, down 1.
DMC has appointed advisers and is expected to make a recommendation to shareholders on the bid soon, following the release of Cape Lambert's bidder's statement last week.

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