Today's AFR:
Golden Grove bids fail to derail 29Metals IPO plans
Veteran miner Owen Hegarty and his private equity outfit EMR Capital have targeted their Australian copper play 29Metals towards the Australian Securities Exchange.
EMR Capital has had Macquarie Capital and Credit Suisse bankers run an auction for 29Metals’ main asset, the Golden Grove mine in Western Australia, while their equity capital markets colleagues (plus Morgan Stanley) prepared the larger 29Metals for an initial public offering.
It is understood trade bids were due on May 13. ASX-listed Sandfire Resources, advised by Citi, was among parties to lob an offer but it’s understood there’s been no movement in the fortnight since.
So, for now at least, the IPO process gathers steam. The sponsor brokers sent detailed pre-deal marketing reports to fund managers on Monday night, outlining 29Metals’ key assets, its financials and seeking to value the company.
As always, there are sure to be big differences in valuations depending on the commodity price forecasts. Credit Suisse, using the bank’s in-house copper price expectations, said 29Metals was worth $1.08 billion to $1.46 billion on an enterprise value basis.
At spot prices, Credit Suisse’s team said it was worth $1.6 billion to $2.1 billion, as revealed by Street Talk. Morgan Stanley was also bullish, putting a $1.53 billion to $2.14 billion price tag on the business.
The analysts are expected to spend the next week or so taking funds through their reports, while their investment banking colleagues try to rustle up bids.
________________________
Ash here.
If Sandfire is bidding, OZL will have had a good hard look too.
Technicals: https://miningdataonline.com/property/521/Golden-Grove-Mine.aspx
Golden Grove would be a tasty addition to OZL, though Owen Hegarty will want a very full price.
Could AC & team find, say, $1.6b to buy the asset without a capital raise or upsetting the large capex plans for existing operations?
Yes.
Ash
Add to My Watchlist
What is My Watchlist?