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DMC welcome 50c offer from Meijin Energy
The West Australian May 5, 2010, 3:13 pm


DMC Mining has welcomed a potential 50 cent takeover offer from China's Meijin Energy Group, trumping Cape Lambert Iron Ore's sweetened 46 cent bid.

The company has entered into a conditional takeover bid implementation deed for Meijin to acquire all its share through a 50 cents a share off-market takeover bid.

The offer would value DMC at about $43.4 million.

DMC managing director David Sumich said the Meijin offer, if made, was compelling for DMC shareholders, given its premium of 8.7 per cent to the Cape Lambert offer.

Meijin would only make the offer if it can complete due diligence on DMC and the company entering a pre-bid acceptance agreement with an entity associated with Mr Sumich.

The preconditions must be waived or satisfied before 5pm Friday for Meijin to make its offer.

The deal sets up a mutual break fee of $150,000 if either parties breach conditions.

DMC's directors have agreed they will recommend shareholders accept the Meijin offer in the absence of a superior proposal and subject to the proposed price being within or above the valuation range as assessed by an independent expert.

DMC directors will also accept the offer for their own shares under the same conditions.

The company said it had appointed BDO Corporate Finance as the independent expert to determine whether the Cape Lambert offer is fair and reasonable.
DMC shares last changed hands for 50 cents.